Wim plast


(iamvinod) #1

This stock was discussed once in the thread "Top Mispriced Bets for next 6-9 months. 50% upsides? " I think it deserves an own thread.

Wim Plast ltd, a part of Cello group, is into making plastic moulded furniture and bubbleguard sheets. The moulded furniture segment contributes major part of the sales while contribution of bubbleguard sheet segment is fairly low at this point of time. Company is based in Daman, has strong consumer base throughout the country; and is under rapid expansion plans by setting up plants at Chennai and Kolkata.

Financials

Year FY08 FY09 FY10 FY11 FY12
Sales 70.71 91.97 130.52 158.05 201.47
PAT 3.12 8 17.01 18.25 22.75

5 Year sales CAGR > 30%
5 Year PAT CAGR > 60%

Q1FY13 - Sales up 40%, PAT up 53% (y-o-y).

ROCE > 30 & ROE > 20 and consistent.
Zero debt, Promoter holding - 74.98%
No equity dilution for last many years.

Stock was stuck around 200 levels for a long time, sharply ran up to 330 levels recently. There was a rumor(?) that promoters bought a few stocks from open market to make their holding 75%. This could be the reason for the recent rally.
But even at CMP 330, PE <8, stock doesn’t look expensive.

Disc : My views may be biased as I have significant holdings in Wimplast, allocation > 20%, which was accumulated around Rs.200. Not planning to exit/book profit at current level.


(Vinod MS) #2

Hi Vinod,

Congrats for good performance here in terms of stock returns and good capital allocation.

The last 3 years trend shows a different picture from the 5 yrs one. Sales growth is higher at 22% whereas NP growth is at 15%.

What are the reasons for this slowdown and what is your view on expected growth in the next 2-3 years?

Cheers

Vinod M S


(iamvinod) #3

Thanks Vinod.

With the new plants contributing to the revenue, company is back into growth track since H2FY12. I expect performance in line with Q1 for the next couple of quarters at least.


(Ayush Mittal) #4

Yes, the latest annual report talks about 3 new plants all from internal accrual.


(iamvinod) #5

This is the best thing I found - even after these series of expansions company retained its debt free status.


(HG) #6

Wimplast is about 10% of my portfolio. I also bought it at 200 levels.

Moneylife has written about Wimplast in their Sep picks -

There isn’t much FI participation in this yet. I feel if the results keep up, then at some point, some FI will get in. I am holding on for now.


(HG) #7

Hi Ayush,

Request you to give your views on Wimplast.

thanks,

HG


(Ayush Mittal) #8

HI HG,

The co has done pretty well in the past and has grown steadily. For this year also growth is expected to be 20%+.

My exposure is low as I’m undecided on the quality of business and size of opportunity. Otherwise its an interesting stock to own whenever it falls to 6-7 times earnings.

Ayush


(HG) #9

Thanks for assessment. To me, Wimplast seems to be a case of a good performer in a boring industry. But I am also undecided whether to add at current prices or to wait for a better price.


(HG) #10

I have not been able to find out the revenue breakup between the plastic furniture/packaging/building material segments. Does anyone have information about the revenue breakup?


(HG) #11

Wimplast hits 52 week high today - Rs. 367.7


(Ayush Mittal) #12

Fantastic upmove to 390 in a small time…booking some profits now. May exit as my qty was small


(Dhwanil Desai) #13

One of the stocks which I spotted quite early, but did not invest as I wanted to dig more! And by the time I felt confident about undervaluation, developed price anchoring biased…:frowning:


(HG) #14

Ayush,

All you seniors are quite adept at booking profits near the highs! Could you share how you go about when to sell? Do you also look at technical indicators like some of the others do?


(ASHOK SHAH) #15

Dear Ayushbhai,

I have my 7-8 year old story to tell on Wimplast Ltd.I had a fascination to visit AGM of this Co as at that time Wimplast was earning only Rs.3-4 EPS but was distributing dividend every year Rs.3 to Rs.3.5 and hence visit to AGM.I first time visited to Wimplast AGM 7-8 years ago.As I was new I asked Auto take me to Cello factory from VAPI station.Auto driver had taken me to one factory of CELLO group which were making only TIP of ball pen at that time.Luckily Full board of Wimplast was on visit to all plant in VAPI-SILVASA area of for all group Co and hence I met promoters and visit some plant with board and then AGM.Group had more then 10 plants in VAPI at that time.

During my 1st AGM and after AGM while meeting and talking to them I got to understand reason for giving HIGH div and they promise that We are closing loss making depot and also moving out out of EAST INDIA due to poor quality competition on recycle and low weight chairs.Stock price was in the range of Rs.30-40 for full year.I invested as FD in Co.Over next 2 year Co closed few depots and started bubbleguard sheet business for making box for Apple and other fruit to transport but It became impossible to sell as RM price had increased by more then 50 % and hence finished product also.Again they solved this problem and created new use of that plant and made profitable this plant also.Within 3 years Co became debt free and they started again expansion in chair etc with new product range.During this 3 years I also came to know about their CSR activities in JAIN community and also for more then 6000 employees at that time in all other business.

So here was a co with all type of problem but confident to declare 100 % profit as dividend and also solve all problem as a best opportunities and hence investment in stock by me in this Co.

Now CO is on growth phase with INDIA growing in consumer sector and looks to me to be good for next 2-3 years as promoter has decided not to accept any debt but grow with internal accruals and give 20 % profits as dividend also as per last AGM.

They are exploring some new opportunities in some new related area for which they are tight lipped as per my meeting with CFO 2 months back.


(HG) #16

Hi Ashok,

Thanks for the insight into Wimplast. I have also held onto Wimplast and hope it continues to do well. Do you happen to know the segment wise break up of revenue? Has the bubble guard product done well in the market? I am unable to find this info on the web.


(Ayush Mittal) #17

Dear Friends,

Ashokji is one of the most hard working investor I have met. He makes sure that he visits every AGM of each of his cos and he does research on several small caps.

We really need to take inspiration from him and start doing ground work like these.

Ashokji, is there any break-up on the contribution from the bubble guard segment in Wimplast and margins and growth prospects there?

Ayush


(Omprakash ) #18

Hi Ayush,

Two months back i met cfo at their corporate office.Cello bubble guard sheets contributes 25 percent to total sales.They are expanding bubble guard sheet capacities.In this segment there are two types of sheets one is Bubble guard sheets and Wimplast is the only company manufacturing Bubble guard sheets in India.Bubble guard sheets has multiple applications like Printing, packaging , floor protection , false ceiling etc.Of these Floor protector is fast moving and has good demand. Another one is Flute guard also has various applications and there are some more players in this segment.They indicate me that they are introducing various new products and exploring new opportunities.

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Check this very good promotional video of Cello bubble guard sheets and it’s various applications.Potential is huge.

http://www.cellobubbleguard.com/ Link: http://www.cellobubbleguard.com/


(Donald Francis) #19

Dear Ashok,

Thanks a lot for the insights into Wimplast Mgmt Ethos. Your feedback is very valuable when trying to understand the company better.

Impressed by Ayush’s remarks about your research work. Please keep it up, share and help inspire many more among us to do similar work. May the tribe keep growing;)

Rgds

Donald


(Tony) #20

On the basis of Point and Figure charting I find that the stock has made a double bottom at 350. If this support is broken then next support is around 335-40 or at 320. This stock is bullish since April 2012 and consistently trading above the bullish support line. The stock is trading above its 50 DSMA of 346 and 200 DSMA of 250. Currently the stock is in sell signal. Wait for a change of signal.