Kabra Extrusion Technik

[prabhakar]

Kabra Extrusiontechnik Ltd (KET), a part of Kolsite group is a leading manufacturer

of Plastic extrusion machinery in India. KET offers a wide range of hi-tech

sophisticated single and twin screw extrusion lines for pipes, profiles, pellets, PO

pipelines for HDPE/PPR, teleduct, mono and multilayer blown films etc. The company

has over four decades of rich experience in plastics industry. It has got the coveted

âTwo Star Export Houseâ status. The Company has won âExcellence in Exportâ award

five times and also is an ISO 9000 Company. KET has been benchmarking in plastics

extrusion industry by sophisticated R & D techniques and various processes to cater

to the market requirements for low power consumption, high output, maintenance

free and user friendly Plastics Extrusion plants and machineries. KET has a joint

venture with global leaders in plastics extrusion machinery viz. Battenfeld

Extrusionstechnik, Germany and American Maplan Corporation, USA.

KET offers following major product lines viz.

1. Twin screw extrusion lines for extrusion of RPVC/ CPVC pipes, PVC profiles &

pellets

2. Single screw extrusion lines for PO pipes

3. Mono layer and Multi layer Blown film lines

KET is dedicated to provide various solutions in the above product lines customised

to meet the specific requirements of an extensive range of plastics processing

applications

Particulars	Mar2010	Mar2009	Mar2008	Mar2007	Mar2006	Mar2005
INCOME :
Sales Turnover	204.48	165.08	160.56	137.87	109.99	76.26
Excise Duty	9.67	11.58	14.78	11.29	9.48	6.11
Net Sales	194.81	153.50	145.78	126.58	100.51	70.15
Other Income	2.50	4.14	4.86	2.12	3.37	3.85
Stock Adjustments	-2.29	-0.39	3.44	4.37	3.22	0.88
Total Income	195.02	157.25	154.08	133.07	107.10	74.88
EXPENDITURE :
Raw Materials	126.69	104.09	103.98	94.95	76.94	50.58
Power & Fuel Cost	0.92	0.79	0.68	0.65	0.61	0.50
Employee Cost	13.83	12.62	11.46	8.57	7.33	5.23
Other Manufacturing Expenses	1.75	1.52	1.17	1.12	1.34	0.87
Selling and Administration Expenses	13.68	14.40	11.34	6.94	6.64	5.44
Miscellaneous Expenses	2.42	2.62	1.20	6.70	3.82	4.18
Less: Pre-operative Expenses Capitalised	0.00	0.00	0.00	0.00	0.00	0.00
Total Expenditure	159.29	136.04	129.83	118.93	96.68	66.80
Operating Profit	35.73	21.21	24.25	14.14	10.42	8.08
Interest	1.51	1.26	1.48	0.49	0.38	0.12
Gross Profit	34.22	19.95	22.77	13.65	10.04	7.96
Depreciation	3.39	3.66	3.37	3.04	1.51	1.33
Profit Before Tax	30.83	16.29	19.40	10.61	8.53	6.63
Tax	9.00	3.70	4.38	2.55	2.10	1.85
Fringe Benefit tax	0.00	0.21	0.19	0.21	0.26	0.00
Deferred Tax	0.36	0.68	0.32	0.59	-0.15	0.20
Reported Net Profit	21.47	11.70	14.51	7.26	6.32	4.58
Extraordinary Items	-0.11	-0.08	-0.12	-0.02	-0.05	-0.01
Adjusted Net Profit	21.58	11.78	14.63	7.28	6.37	4.59
Adjst. below Net Profit	0.00	0.00	0.00	0.00	0.00	0.28
P & L Balance brought forward	34.50	29.60	22.19	19.88	17.83	16.21
Statutory Appropriations	0.00	0.00	0.00	0.00	0.00	0.00
Appropriations	20.53	6.80	7.10	4.95	4.27	3.24
P & L Balance carried down	35.44	34.50	29.60	22.19	19.88	17.83
Dividend	5.58	4.79	4.79	3.59	3.19	2.40
Preference Dividend	0.00	0.00	0.00	0.00	0.00	0.00
Equity Dividend %	70.00	60.00	60.00	45.00	40.00	35.00
Earnings Per Share-Unit Curr	25.71	13.65	17.17	8.33	8.57	6.18
Earnings Per Share(Adj)-Unit Curr	6.43	3.41	4.29	2.08	2.14	1.54
Book Value-Unit Curr	109.60	90.88	83.23	72.07	63.91	59.99

Parameter++ Click on Parameter for definition	Value	Industry Median	Industry Weighted Avg		Parameter++	Per Share Value
Gross Margin	25.3%	21.2%	17.6%		Last Closing Price	63.15
Core Operating Margin	16.5%	9.0%	9.6%		Book Value per share	109.66
EBIT Margin	16.6%	11.9%	12.9%		Long-term Debt per share	10.12
Net Profit Margin	11.0%	6.1%	7.1%		Enterprise Value per share	264.10
Adj Net Profit Margin	11.1%	5.7%	7.0%		Net Cash per share	0.00
Return on Assets	22.5%	5.5%	9.7%		Cash from Operations per share	47.98
Return on Capital Employed	37.2%	14.5%	18.2%		Free Cashflow per share	34.15
Return on Equity	24.5%	10.9%	14.6%		Sales per share	244.26
Asset Turnover	2.04	1.09	1.36		Total income per share	244.52
Cash Return (FCFF/EV)	13.4%	4.2%	-1.3%		PAT per share	26.92
Adj Price-to-Earnings TTM**	7.60	13.93	--		Adj PAT per share	27.06
Adj Price-to-Earnings	9.39	19.83	17.52
Price-to-Book	2.32	1.55	2.51
Price-to-FCF	7.44	31.31	-34.60
EV / EBITDA	5.90	8.04	9.86
Price-to-Sales	1.04	0.96	1.23
Financial Leverage	1.09	1.38	1.51
Interest Coverage	21.42	5.09	5.35
Debt to MarketCap	0.04	0.29	0.20
1y Dividend Yield	2.8%	0.8%	1.2%
1y Dividend Payout	25.9%	9.0%	20.6%
3y Dividend Yield	2.5%	0.9%	1.1%
3y Dividend Payout	31.6%	12.8%	20.3%
3y Sales Growth CAGR	15.5%	11.3%	15.6%
3y Earnings Growth CAGR	43.5%	3.3%	10.8%

[ayushmit]

Yes, seems to be a good company. We should dig in more and see if the company can repeat previous growth.

Regards,

Ayush

[hiteshchauhanca]

hi Ayush is it the same story as you mentioned in your Idea generation presentation about kitex garments ? company telling about expansion in a r of 2011-12 and 2012-13 and same did not reflect in their fixed asset but the same is reflected in march 2015 qtr result.

[inteliinv]

The company looks promising and delivered good set of results last quarter. It has been showing good growth since last two years and has good dividend payout.

Discl: Invested tracking quantity

[ayushmit]

@hiteshchauhanca it could be a good indicator to start studying more on the company and try to understand whats changing.

I haven’t tracked Kabra since quite sometime, so no idea.

Regards,
Ayush

[chiragjain1976]

World plastic machinery demand to grow 7%annually through 2017

Global plastics processing machinery demand is expected to advance 7.0 percent annually through 2017 to $37.6 billion. A healthier sales climate, resulting from accelerations in fixed investment spending and plastic resin consumption growth, will spur market gains through 2017. Equipment utilized in the production of plastic packaged goods will expand at the fastest pace through 2017 and climb the most in absolute terms.

Increases will be spurred by pickups in packaging demand and food and beverage manufacturing activity as living standards continue to rise in developing countries, stimulating greater consumption of packaged goods, particularly foods and beverages. Additionally, generally improved economic conditions in industrialized nations will lead to even higher packaging demand levels there. As a result, packaging will remain the largest single market for plastics processing machinery, followed in size by consumer/ institutional products, construction, and other miscellaneous markets.

3D printers, extrusion machinery to grow fastest

Injection molding equipment will continue to be the most popular product type, accounting for close to two-fifths of 2017 new machinery sales due to its versatility across a wide range of applications.

However, demand for 3D plastics printers is expected to grow the fastest of any plastics processing equipment type from a relatively small current market base. 3D printers offer more flexibility in product design than traditional machines and will provide functional competition to injection molding equipment for custom-made parts, as well as in other low output and prototyping applications.

In addition, advances in 3D printer technology and falling product prices will broaden the market for plastics processing machinery to include utilization by individual consumers, further bolstering demand. Extrusion machinery sales will climb at the next fastest rate, fueled by an increase in world construction activity.

Demand to post strongest gains in emerging markets

Developing markets will provide the best growth opportunities for suppliers of plastics processing equipment through 2017. Central and South American sales will climb the most rapidly, led by the large and fast-rising Brazilian market, followed by the Africa/Mideast region, led by Turkey. China is currently by far the largest national equipment market, accounting for 29 percent of all 2012 sales, and it will continue to dominate global demand in 2017. India will be the fastest-growing national market, however, expanding over 12 percent per year. Rising personal incomes in these developing countries, leading to greater demand for plastic products, will be the primary driver of sales advances.

The Asia/Pacific region will record the strongest plastics processing machinery shipment gains through 2017, led by China, which will account for 59 percent of total regional output. Not only will locally headquartered suppliers step up production, but many foreign multinationals will construct new or expand existing plants in Asia to reduce manufacturing and shipping costs and be closer to fast-growing customer bases there. Asia/Pacific industry output will also rise the most in dollar terms, as regional production expands from its already sizable base to account for half of worldwide equipment output in 2017.

Future looks optimistic.

Disc : Not invested yet

[sushil86]

http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/4AB04B3E_220B_4631_8B2C_CAABBAD1B87F_144004.pdf

Revenue growth 32%
PAT increase 10 fold!

[sushil86]

This is the quarterly result trend, sourced from screener.in (except Dec 15, not yet updated)
Also, adjusted the Sep 15 results for exceptional items.

I have been observing this scrip for a long time and finally took 50% position today after results.
Will probably invest another 50% after the big March quarter lumpy earning.

Disclosure: Forms about 8% of my portfolio currently.

[Equityvista]

Few points about kabra extrusion:

• Formed a joint venture with Italy based Penta SRL recently ,the JV company will set up plant for manufacturing and trading of auto feeding systems for food processing and plastic indusenter link description here

• From 31.03.2014 to 31.03.2015 Market capitalization changed 129.25% and PE ratio changed 45.67%.(source:Annual Report)

• Closing price in NSE on July 1989- 1.25 on 31.03 2015 - 72.10 … growth by 57.68 times.
  adjusted for 1:1 bonus in 2004 & 10 and Subdivision of shares in 2010.( source : 32ndAnnual Report 2014-15 page 26)

*KET has also teamed up with Isreal’s Metzerplas for a technology partnership to jointly develop drip irrigation machinery.enter link description here

*Purchase of fixed assets in 2013-14 was 112.97 lakhs while in 2014-15 it is 2388.85 lakhs.There has been addition of plant and machinery of Rs 2132.10 lacs during the year2014-15.

*The company has intangible assets(Technical how fees) of 1787.50 lacs.

• Cost Raw materials and components has not changed much (3576.49 in 2013-14 and 3769.17 in 2015-16)

*Exports about 34.09% of turnover.

*Expenditure on R&D initiatives 2.94% of sales revenue.

*KET has extended its technical collaboration with Battenfeld-Cincinnati GmbH, a leading global manufacturer of plastic extrusion machinery, till March 2026.

*An interview of the CMD in 2010 regarding an expansion investment of Rs. 85 cr which was supposed spent in next 2-3 years and enhance capacity by 60-70% and double the production is worth reading.
enter link description here

It would be interesting to watch how future unfolds for this company.

*Disc . Invested .May be positively biased.

[hemanghigandhi]

Note prepared by me –

The Company : Kabra Extrustiontechnik (KET) is the flagship company of Kolsite group and one of the largest players in the plastic extrusion machinery known for its innovative offerings. KET specializes in providing plastic extrusion machinery for manufacturing pipes and films. It has two manufacturing locations in Daman.

The company since 1962, has done more than 14,000 installations worldwide and presence in more than 85 countries in Americas, Middle East, Asia and Africa, KET enjoys leadership position in the extrusion market with Coveted 2 star Export House Status. Company has set benchmarks in plastics extrusion industry by modern R & D techniques and various processes to cater the market requirements for low power consumption, high output, maintenance free and user friendly plastics extrusion plants.KET received Two Consecutive National Awards for Technology Innovation in year 2015 & 2016 respectively. KET as a company through constant R&D and Innovation has introduced several products and solutions for the “First” time in the plastic extrusion industry since 1970. The number of such “First” stands at 57 till 2010 and many more thereafter.

Collaborations : KET is having Global Collaborations with the leading companies in plastic industry, as : Battenfeld-Cincinnati (Germany-Austria-USA), Penta S.r.l. (Italy), Greiner (Austria), Unicor (Germany), Extron Mecanor (Finland)

Market Solutions offered by KET serving the ever growing :

Agriculture (Plasticulture) : Plasticulture represents use of applications of plastics in Agriculture, Horticulture, Water management & related areas. A variety of plastics materials and end products are deployed in Plasticulture applications - for water conservation, irrigation efficiency, crop and environment protection, as well as end product storage and transportation.

Infrastructure : Infrastructure is one of the key focus areas of growth. Plastics pipes & profiles play a major role in the fields of Housing, Industrial & Public Infrastructure, Sanitation, Water Reticulation, Irrigation, Desalination & Effluent Treatment, Micro-ducts (Fibre optics) & conduits.

Packaging : Flexible packaging offers solutions for diverse applications in various user sectors including staples and food products, beverages, pharmaceuticals, personal care & household products, cigarettes & tobacco products and a wide range of industrial applications.

Telecom : For telecommunications, cables can be installed in water, in air or underground. The ducts in which the fibre optic cables are installed are usually made of polyethylene. KET manufactures high speed telecom micro-duct lines and high performance bundled sheathing lines to produce micro-duct for 3G & 4G data communication.

Valuation : KET, an R&D and Innovation driven, closely held dividend paying (continuous since last 10 years) company where Indian promoters hold 56% stake (Zero Pledge) & Battenfeld Extrusion (Germany & USA)holds 14% stake, with global presence and well accepted products across continents and serving growth sector such as Agriculture, Infra & Construction, Packaging & Telecom is available at a market cap of just 466 Cr, with sales of 270 Cr for FY17 and Net Profit of 27.6 Cr, giving EPS of Rs 8.68 per share is available at a PE of 16.8 which is bargain than Industry PE of 29.5 and Book value of 58. For FY 18 & 19, KET is likely to deliver topline growth of 10% and bottom line growth of 15%, giving an EPS for FY 18 & 19 at Rs 14.5 and 12.6, at current market price the share is available at an attractive forward PE of just 12.6 times, thus giving investment opportunity for long term growth.

[bagritarun]

Just wanted to check if anyone has any idea on how is the progress on battery assembly. Is the diversification in a related area or something totally new? if new then what prompted it? have they done something different to venture into this technology.

[dm88]

Does the proposal for plastic ban have any impact on KET?

[Vinay_Taparia]

Kabra has announced 7x expansion in its battery division.

Interesting development

[jsmehra]

Excellent Q3 numbers posted. The battery division has started paying off.
6b04812f-e0e7-4ce0-a68e-8c799b9fa490.pdf (4.9 MB)

[VINAYAK_MOHTA]

Just in case anyone is tracking the Company

Wanted to understand the Differentiation in here. As he has mentioned that he is purely just an Assembler. He has however been investing in R&D and some BMS and IoT side of things. Does he plan to go into Manufacturing as well? Because I am not sure why wouldnt the OEM’s just do the assembling themselves and save up on the Margins that he adds to his Business which is substantial?

Or am i missing something here with regards to the Criticality of the Assembling process? Just wanted to know if he is just another Temporary solution or a Critical one which eventually might become a potential Target for Acquisition?

[nandan_ganatra]

Some highlights from Kabra Extrusion Annual report / Investor presention.

■ EV sales trend in india from FY18-23 - growing at 65% CAGR - reached 1 Million this year.

■ EV Battery demand to increase by 53% CAGR in 2030 - from 6.1 GWh to 104 GWh

■ India will require 800 GWh of batteries ( by 2030 ) for attaining 30% EV adoption.

■ Goverment reduced custom duty for batteries to 13% from 21%,

■ Custom duty on imported EVs raised from 10% to 70%

■ Goverment alloted 882 billion INR to EV startups, OEMs, battery makers.

Kabra extrusion expanding R&D

● Targeting 100+ R&D team by FY24

● Market share of 18% in its segment at BATRIXX

● To penetrative E3, E4 vehicles by FY 24 End, and ESS in long term.

● 15 new OEM partners added in last FY.

● 21 new products launched last FY.

● Data collected from battery packs improves right to win. Learnings shared with customers.

● Annual capacity of 2 GWh by FY 24 - by investing 100 Cr.

Disc: I am invested since 2021

[Investor1234]

Thanks for your analysis. What I’m failing to understand is why is there such a huge QoQ de growth this quarter?

[nandan_ganatra]

Not only this quater, there was degrowth even in last quater as well, if you have noticed.

Q3 - 2023 - 120 Cr
Q4 - 2023 - 75 Cr.
Q1 - 2024 - 67 Cr.

Management has said in press release last quater that

“Growth curbed mainly due to new battery standards becoming effective from April 23, leading to old inventory clearance & change of battery design.”

Apart from this, subsidy blockage by goverment could also have been reason for this degrowth. - my personal view.

These are minor headwinds in what I believe is a long growth journey for this sector.

Having said that, as an investor, I will keep a close eye on management guidance and their execution.

[Investor1234]

Thay have cancelled their con call

[colonel]

• I could be wrong yet at present I feel that there isn’t any widely accepted and successful battery standard…every OEM is building with their a spcifications.
• Very lately Toyota is saying that is building a solid state battery that will be even better.
• Till the time the industry come to a point when there is not much upgrade possible in the battery development…that is the point this battery market will really make money.
• Till that time…there will be a lot of money wasted by multiple players doing re-development or incremental developments to get out a near perfect battery standard.

Always open to hear thoughts challenging mine