Emmbi Industries - Boring name. boring business


I am new to value investing.

I have been observing Emmbi industries for the last 2 yrears.

Emmbi Industries Limited is an India company, which is involved in manufacturing and trading of plastics products. The company has a market cap of INR1.45 billion. The Firm makes and trades high-density polyethylene and polypropylene -woven polymer products and raffia products. It has a P/E ratio of 17.5 . It makes and sells flexible intermediate bulk containers (FIBC) and woven sacks, and various woven polymer products, such as container liners, protective irrigation system, canal liners, flexi tanks and car covers.

Below are some of my observations :

Sales growth for last 5 years : 17%

NP growth for last 5 years >= 14 %

Tax payout for last 5 years >= 16 %

ROCE AND ROE increased for 9.xx to 12.xx and 11.xx resp.
NPM % has been consistent at 3.xx % . [ which looks decent for a commodity business]

Debt to Equity ratio at 1.2 looks decent after a decent amt pumped towards capex. during the last 5 yrs.

Current P/E :17.3

With my limited knowledge, the business looks good and headed north [ at 15 - 20 % cagr] in the near future unless the management does something terribly stupid.


Looks decent till date.
Noting terrible reported till date about management.
The company is run by makrand [ iit - mit] and rinku appalwar [ husband and wife ]
1st generation entrepreneurs.

Anyone else also invested EMMBI ?
Pls add on whatever information that you can get.


Disc: Invested from RS. 8 and adding via Stock SIP.


I verified this stock when the promoters are increasing the stock at 15 levels.
But when i found that they are involved in IPO manipulation, i stopped tracking it.
You can go through the below link.


The article doesn’t mention that promoters were involved and the fine was on Keynote Commodities and not on the promoters.

I did start to have a look at this company at 19 Rs odd, as for a micro cap company then, I felt decent information was available in the public domain and digging more info was possible (which isn’t always the case with microcap companies). I haven’t looked at it in detail, and it ran up too fast before I could devote more time to find out more about the company. I was more comfortable at Rs. 19-20 odd levels for such a small company, but later when it shot up I didn’t have enough liquidity so gave up researching.

I am putting up links to some videos that I had seen online. Promoters are first generation entrepreneurs and looks like they come from a humble background. It is very pre-mature to pass a verdict on promoters but I had liked what I started seeing (if only it was so easy to form impressions just on the basis of videos :smile: )

The industry that they are into looked boring and also looked like the product is commoditised in nature and can be produced by any new player. There are some other small companies that are also listed on exchanges and produce similar/same products. I think in the un-organised sector also there may be many manufacturers of this product.

Please Note - I have put up video links just on an FYI basis for members who maybe interested in this company. I don’t have a view on this company as haven’t researched it in detail.

Kind Regards.

1 Like


Please put up any risk factors u can think about to make this discussion a balanced one.


1 Like

wAS VERY ATTRACTIVE sub 25 levels … must have loaded more …

tHanks for pointing that @hitesh2710 bhai …

Risk would be :

No moat. A stronger player [ TATA / RELIANCE] can come up with a much superior and larger pdn line any time .

Two key risks i can think are Crude Oil price and asset heavy business model. I see profit is increasing along with debt.
However their ROE and ROA showing improvement in the last 2 years. It used to be low margin business(approx 3% Profit). However i believe, going forward their margin would increase against the backdrop of low crude oil price and purchasing their product by the leading e-commerce retailers for packaging.

Disclosure: Invested at Rs 9 and Sold at Rs 12 in 2012-2013 after realizing it was low margin business. Bought again at Rs 24 and holding as i realized it’s fortunes are changing for the reasons mentioned.

I prepared a small notes on Emmbi Industries:

 Emmbi industries (previously known as Emmbi Polyarns) is one of
India’s largest speciality polymer processing comapny pioneer in
manufacturing and sale of FIBC (Jumbo Bags) and Woven Sacks and
various woven polymer based products like Container Liners,
Protective irrigation system, Canal Liners, Flexi Tanks, Car covers
etc. In addition to FIBC company manufactures various woven
polypropylene products including Small bags, Box woven bags, Roofing
underlayment fabric, Courier bags, Ground covers, Silt fence and
Geotextiles & offer woven bags and fabrics in both PP and HDPE.
Their products are UV stabilized and pre-conditioned against

 The Company is involved in producing various types of Specialty
Bulk Packaging material for the Indian Market.  In Domestic market,
remains one of the most active players for the packaging needs of the
E-Commerce Companies, FMCG Products such as Detergent Powder, Branded
Salt and Branded Wheat flour etc  Major customers are from cement,
fertilizer, tea, sugar, seeds, food grains–Raw material etc.

 It has a customer base of around 180 spread across various
countries.  It has the one of the worlds largest fully intergrated
Woven Polymers plant manufacturing wide range of products.  Revenue
increased from 1 Cr in 1997 to 190 Cr in 2015. Last 3 years revenue
growth is at 18% CAGR.  Profit had grown by 37% CAGR during the

 Have wide range of Product portfolio like:

  1. Flexible intermediate bulk containers
  2. Protective irrigation textiles
  3. Flexible and bulk water tanks
  4. Car Covers
  5. Geo Textiles, which are used in Chemical, Cement & Agriculture industries
  6. Water conservation products
  7. Packaging

 50% of the revenue comes from Exports to more than 50 countries in US, Europe, South America, Few African countries, Australia, Middle East etc across 5 continents.
 Exports from US, UK, Europe has increased by 55% YoY and Middle East increased by 400% (on a lower base).
 Company is confident of showing promising growth in future from Export markets.
 Owns Aqua Save brand which mainly have 2 products: Flexi Water tanks & Cannal and Pond Liners. They are exported to more than 12 countries.
 Manufactures 6 Lacs Jumbo bags every month and over 1 Lac Woven Sack bags every day.

 It produces 350 KM Fabric every day. Operates at 4 manufacturing plants in Maharastra.
 India’s first Woven polymers processing company, who is ISO 9001 cerfified from past 15 years for designing and manufacturing.
 Management to concentrate on Water conservative & Water transportation products where they find the potential.

 There was an SEBI case on underwritter “Keynote Commodities” during IPO times involving the malpractises to increase the subscription of IPO for Emmbi.

Here is the link: Business News Today: Read Latest Business news, India Business News Live, Share Market & Economy News | The Economic Times 02/news/41008323_1_emmbi-polyarns-entities-sebi

 With the raise of IPO money, promoters promised to estalish a annual capacity of 17800 MT, and actually had established 18200 MT.
 Current revenue is 193 Crs, and doesn’t need any more capex till it the revenue reaches around 300 Crs.
 Company has constantly paying the dividends since IPO. This year they have increased the dividend from Rs 2.5/- to Rs 3/-

 Management is constantly buying the shares from Open market. It has bought almost 5.5% equity in the past 2 years.

 Geographical Share of Revenue (i.e 50% of total revenue). They have achived a mile stone of crossing 100 Cr in Exports this year.

  1. USA: 37%
  2. Europe: 36%
  3. UK: 14%
  4. Oceania: 7%
  5. Asia 1%

 Products share of Revenue:

  1. Speciality packaging: 47.75%
  2. Advance Composites: 35.50%
  3. Water Conservation: 14.5%
  4. Agri products: 2.25%

EBITDA Margins moved from 9.8% in 2011 to 13% in H1F16
 Last year alone, EBITDA margins increased by 31%.
 ROE expanded from 5.6% in 2011 to around 13% this year
 ROCE expanding from Single digit to 13% in H1FY16
 D/E of 1.27
 ROIC of 15%

 H1FY15 vs H1FY16 has seen a Sales growth of around 21% and PAT growth of around 193%.

 This is backed by the huge reduction in Raw material cost. In the same period sales inreased by 21%, where as Cost of Raw materials increased by 6%.

 Also to mention here, for the same period during FY2014 to FY2015, the Raw material cost was UP by 12.5%.

 Hence the decrease in Raw materials (mainly Crude) will have an positive impact on Margins going forward.

 Current capacity utilization is 68% (as per the latest AR). This says that there is no major Capex requirement in the coming future. (As per the management, the current capacity will have full utilization by 2018).

 Risks include:

  1. A very unorganized and a competitive sector.
  2. A commodity product and so called its brand “Aqua Save” is in initial stages and may take a lot of time to capitalize on its brand value.
  3. Dependent on global Crude prices.
  4. Thin margins. Margin expansion majorly dependent on the capabilities of the efficient management (which we can see are improving)
  5. No information from management on the Debt reduction. Even though it is not currently at scary level.
  6. We are not sure of how management going to deal with future Capex requirements (not immediately, but over a period of 18-24 months)


Disclaimer: Invested.

Krishna Kishore A


I don’t know about the co, but dividend increased from 0.25 paise to 0.30 paisa & not from Rs 2.50 to Rs 3,on Rs 10/- paid up share.

Emmbi Industries Ltd has announced its results


Investor Presentation

1 Like

I was looking at the balance sheet of Fiberweb India LTD and i see that reserves and surplus is negative for FY 2016 & 2015. I have never seen that before. Why is that? And what is BIFR?

(post withdrawn by author, will be automatically deleted in 24 hours unless flagged)

I went through the latest presentation, I don’t see any explanation for the negative Reserves and Surplus. It would be nice if you can point me in the right direction.

This will explain the reason behind the networth turning positive from negative.

Guys, please start the individuals threads on the respective companies instead of cluttering this thread. Thanks.

1 Like

Hi Hitesh,

It seems that you were interested in this company. Are you still interested? How it fits on your parameters?


Emmbi inaugurated world’s largest pond liner plant and hope to acquire 10% of Rs. 2000 cr market in this area.

Listen to management discussion:

Also, institutions are increasing their stake.

Icici & KR chouskey both recommending a TP of 180.

Is this going to be a story for 3-4 years?

Debt to equity reduced from 1.2 to 0.84.
operational efficiency is increasing consistently.
Net profit margin increases from 3.5% to 5% .
OPM increases from 10% to 12.35% .
Very conservatively emmbi should continue growing at 15- 20%.

Disc: invested.

Can any one help to calculate expected EPS analysis for next 2-3 years?
e.g. after Q4 we expect EPS of 7? Q1FY17-18 EPS 9?


For FY-16 EPS was 5.99 and TTM EPS is around 7.

As per Q3 con call they are expecting at around 65-70 crs of revenue for Q4/FY17 (which also match with their 12-15% guidance in their top line for FY-17) and at around 5.5% net profit margin the FY-17 EPS will be in the range of 6.9 - 7.1

For FY18/FY19, management has guided about 20% top line & 1.5x (i.e. 30%) in bottom line.

For FY18, if you look at the recent interview & Q3 con call notes they are expecting at around Rs. 18-23 crs. of revenue from pond lining business & Rs. 10-15 crs. of business from the new Pharma & Food grade facility that they are going to unveil in May (this could be the next trigger for stock price). Which means these new facilities combined will add around Rs. 28-38 crs of revenue and even if they increase other revenues (from current operations) at 10% that will make it 230 + 23 + (28-38) crs of revenue for FY18 which is again inline with the guidance of 20% growth for FY18. They are expecting EBITDA margins to be at around 13.5 - 14% for FY18 (around 120 bps increase from current levels of 12.3).

Even if we consider 6% NPM FY18 EPS is coming at around 9.5. I took 6% because the new facilities are high margin oriented and other operating efficiencies should help in increase the NPM.(May be I might be aggressive here, please do let me know if there are different views).

Attaching the snippets from Q3 con call notes:



Disclosure: Invested and forms third largest holding in pf. Waiting for 150 levels for adding more.


Emmbi posted good set of numbers. As I expected in my previous post full year EPS is at 7.2 for FY17.


  • Commissioned a new plant for pond liner business.
  • Soon will commission the new plant for US pharma & food grade facility.
  • Dividend of 50 paisa per share.

Full results:

Disclosure: Invested and forms largest holding in pf. Waiting for concall on 05/22 for getting more details on the improvements.

1 Like