Consistent 5year CAGR of 20% in Sales, 28% in PAT, 26.5% in EBIDTA.
EBIDTA Margins over 20% for last 3 years, Net Profit Margin near 9%,
debt equity ratio 0.47
Trading at a p/e near 3 and dividend yield over 6.5 %
Operates in Niche segment of industrial packaging. Moved from a specialised player in steel strapping in 1993 to a supplier of a range of industrial packaging consumables to one stop shop packaging solutions ( Operational contracts) provider in 2012.
There are no comparable companies having a range of industrial packaging consumables i.e. steel strappings; Polyester Strapping & PP strapping; Corner Boards; VCI Paper and collated nails. Industrial Packaging is part of the packaging industry that primarily deals with bulk and industrial packaging and primarily caters to manufacturing sector.
Amongst the few players in the organized segment of packaging industry catering to the growing demand for Industrial packaging consumables in India. Cater to companies across wide spectrum of industries like steel, aluminum, glass, copper, paper, automobile, white goods and refractory to name a few. over 500 customers located in India as well as internationally
High Tensile Steel Strapping: Midfield Industriesâ flagship product High Tensile Steel Strapping is used to ensure that the material is strapped well and it does not shift during transit.Used for heavy-duty packaging. Well known Brands: Supreme and Mega Supreme.Steel strapping uses cold rolled steel as raw material, fluctuation in raw material prices can adversely impact profitability.
Operational contracts: Midfield Industries provides end-to end packaging solutions (men, materials and equipment) to enable customers to focus on their core business.
Undertaking an operational contract entails capital outlay wherein an adequate inventory has to be built at the clientâs site. Company is focusing on more operational contracts to widen the product offerings, and create a ready market for their products. Essar Steel, NALCO, Vizag Steel Plant, and Bhilai Steel Plant represent some of the key clients for whom they have undertaken operational contracts. It seems ITW Signode (not listed) is their competitor in this area. Mgt used to work with ITW signode previously.
Tend to have negative operating cash flows due to increased working capital investments, primarily in inventories and receivables and in operational contracts.Huge debtor days - not easy to wrest payments out of steel plants
Came up with an overpriced IPO around Rs 130 in 2010 at 20x earnings. It seems this was oversubscribed 13x ! After the IPO, operators took over the stock and it went to 440 after which it came down on continous circuit filters. It does not look like the management was involved in the rigging.
Inviting opinion from seniors… does anyone see value at this point?
Disclosure : awaiting blessings to invest