Updated based on the consolidated figure:
Revenue CAGR(5 year & 3 year) : 45%
NP CAGR(5 year) = 32% , 3 year: 24%.
For convenience of all, pasting the details from different sites:
1)From Company’ official blog:
**a)**Neo Corp Offers Avant-Garde Packaging Solutions
Across the country renowned leader in Packtech industry, Neo Corp International Limited has been delivering the best packaging solutions since its inception. Led by Mr. Sunil Trivedi, the company is holds an expertise in the field and this is aided with its use of ultra-modern technology. Neo Corp provides the most superior and cost effective solutions for storage, carriage and protection.
Neo Corp provides textile based temporary containment, carriage, storage and protection of industrial, agricultural and other goods. Mr. Sunil Trivedi, Chief Managing Director of Neo Corp International Limited, believes that packaging is an ideal application for textiles. From heavy weight woven fabrics which can be used for bags, sacks, FIBCs, wrappings for textile bales and carpets to lightweight woven fabrics used as Leno bags and other food and industrial product wrappings, Neo Corp deals in a variety of products.
Neo Corp produces three varieties of products under its Packtech industry:
Low GSM Products: Neo Corp presently manufactures PP/HDPE woven fabric which can be converted into Sacks/Bags, Wool Packs, Box Bags and Custom Design Bags. It is made of Polypropylene and the product range includes fabrics, box bags, sand bags, valve bags, bale wraps, wool packs, woven sacks, etc.
Leno Bags: Leno bags are permeable which allow air to pass and helps in keeping the product fresh. They are very flexible, efficient and can carry loads of over fifty kilograms. They are used for packing onions, potatoes, garlic, ground nuts, fruits and vegetables, flowers, etc. They are safe and remain fresh for longer durations. They can be easily re-used and washed. They have superior aesthetics, are chemically inert, cost effective and recyclable and have excellent mechanical properties.
FIBC: Neo Corp also provides a variety of filling and discharge options. Various kinds of filling options are available at Neo Corp which varies according to the difference in products. For example, tops are not required for cheap products, duffel top provides easy access whereas draw cord permits air flow but still confines the product. Neo Corp also helps people choose the right discharge options which saves both time and money. It also provides lifting options and liners and accessories.
b)An international Leader of Packtech, Neo Corp diversifying:
One of the international leaders in Packtech industry, Neo Corp International Limited (NCIL) has been expanding significantly. The company has a range of growth initiatives which have led to its diversification into Geotech and Agrotech segments also, adding to Packtech. With the company’s healthy financial past and its profits, it has made its place into National and Bombay Stock Exchanges as well as Luxembourg Stock Exchange. Neo Corp has had an excellent export performance and an equity base of 38.02 million shares. This has helped the company enjoy Government-recognized Star Export House Status. A planned capital investment and constructive management culture has helped NCIL encash all the opportunities that have come with easing down of trade norms.
NCIL’s two main subsidiaries are:
Europlast Limited
A UK-based company, Europlast Limited sources, stocks and distributes technical textiles to wholesalers and retailers of the product throughout Europe. The company has its headquarters in London, UK and was incepted in the year 1998. NCIL has been offering better returns by virtue of this subsidiary. NCIL has also been able to keep proximity to end users wherein the fidelity is higher, owing to Europlast.
NCIL has benefitted in more than one way through this subsidiary. It has also been providing better customer service and has a minimized credit risk due to debt insurance cover availability in UK for supply in whole of Europe.
IPC Packaging Company Pvt. Ltd.
IPC is a Bangalore-based manufacturer of PP / HDPE woven FIBC, jumbo bags, sacks, tarpaulins, box bags, PE liner etc. NCIL acquired the company in November 2014.
Spread over an area of 2.62 lac sq ft and a built up area of 2.04 lac sq ft, IPC is a hi-tech production plant and is situated very close to the industrial sector. NICL’s acquisition of IPC has advantaged the company in many ways.
Other subsidiaries of NICL include:
Sacos Indigo Private Limited
Netflex Infracon Limited
Polybase (HK) Limited
Polylogic International Private Limited
2)Chartered Accountant blog:
NEO CORP INTERNATIONAL LIMITED(NCIL) – BSE CODE-523820
NCIL is a Public Listed Company with an equity base of 38.02 million shares.
NCIL since its inception was dedicated towards making tailor made products under Packtech and now it has the status of one of the best and reliable suppliers in Packtech products internationally.
It has also entered two more segments of technical textiles namely Geotech and Agrotech.
It is listed only on BSE as of now. It was trading on NSE through Madhya Pradesh Stock Exchange (MPSE).MPSE is in the course of decognitiion hence NCIL permission to trade on NSE was withdrawn since 30th January 2015. The company has filed an application for relisting and should be traded on NSE soon.
NCIL is also listed on Bourse de Luxembourg(Luxembourg Stock Exchange).
CHARTEREDINVESTOR PICK
Technical textile sector is one of the most innovative branch of the industry in the world, ranking as one of the five high tech sectors with the greatest potential for development. The success of technical textiles is primarily due to the creativity, innovation and versatility in fibers, yarns and woven/ knitted/ nonwoven fabrics with applications spanning an enormous range of users. The ability of technical textiles to combine with each other and with others to create new functional products offer unlimited opportunities for growth.
Traditionally, North America and Europe have been the major markets for technical textiles in the past but in recent years, the sheer volume of demand from Asia Pacific has outpaced demand from North America and Europe. With better technology capabilities, ever increasing demand from different end user industries, technical textiles are expected have a huge market to cater to globally.
India’s export of technical textiles has grown from US$ 624.95 million during 2007-08 to US$ 1355.04 million in year 2012-13 with a CAGR of 17% indicates encouraging global demand for India’s technical textile products. Furthermore, the import of technical textiles has grown from US$ 835.82 million during 2007-08 to US$ 1434.97 million in year 2012-13 with a CAGR of 11% shows that Indian consumers have significant demand for technical textiles products.
These statistics highlight not only concerted domestic needs, but also India’s potential to address global demands, for technical textiles products. With advancing technology, higher integration with global markets and greater sensitization to market needs, the Indian technical textiles industry demonstrates significant potential, for the development of local industry and prospective entrepreneurs.
Technical textiles are an important part of the textile industry and its potential is still largely untapped in India.
NCIL MANAGEMENT:
Neo Corp is run by learned and highly experienced people from the related fields. Few of them are:
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Mr. Shrawan Kumar Patodi : Eminent Lawyer having vast experience in the field of low and 10 years of experience as export executive. Educational qualification - B. Com. M.A., LL.B. and D.H.B.
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Mr. Ladharam Patel : 40 years of experience in the manufacturing business.
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Mr. Rollande Coderre : An entrepreneur from Canada having experience in vast number of fields like packaging, construction, etc. Educational qualification - Degree in Business Administration and business accounts & finance
THE NUMBER GAME
Let us have a look at the financial results of past years.
Neo Annual consolidated numbers from screener : Last year EPS 12.84
The numbers speak a lot about its performance. The return on the capital employed in to company over a period of 3 years is above 16%. Also the cash flow has been improving. At current levels, NCIL is trading at 2.5 PE which is very much lower as compared to the industry PE of 22. Also the business has huge potential to grow. Trading at 60% of its book value provides huge ground for upmove.
CONTROL MEASURES:
The company has hired world class professionals for proper control over the business activities. This has helped to improve productivity, provide better services, reduced cost and increased returns especially on human capital. The company’s internal control systems are commensurate with the nature of its business and the size and complexity of its operations.
STRENGTHS:
· NCIL products are of ISO quality standards and the BRC & Astho will enable NCIL to enter rich e markets.
· Worldwide ever increasing demand.
· It is also into business of Geotech and Packteck. Thus agricultural and infrastructural activities will give impetus to the growth.
· It has a large domestic market which helps to spread the risk.
· New acquisitions will add further to increase in proximity and develop new and better customer relations.
· NCIL has the highest production capacity of technical textiles in India.
WEAKNESS:
· The market is price sensitive and thus is susceptible to pricing pressure.
· Competition from other countries.
With a view to take on the competitors in the global markets, NCIL has been increasing its business and developing client relations. It had its business spread across 20+ nations and has been serving 550+ clients.
It has 6 subsidies namely
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Europlast Ltd
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Sacos Indigo Pvt Ltd
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Netflex Infracon Ltd
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Polybase Ltd
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Polylogic International Pvt Ltd
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IPC Packaging Co Ltd
Europlast Ltd was incorporated in UK in 1988 and was engaged in sourcing and distribution technical textiles. The acquisition of Europlast was very crucial. Europlast Ltd was operating for over a decade and established itself as the leading player in its business in Europe. Acquisition of Europlast has proved to be very much advantageous in the form of better customer services, reduction of risk on account of credit sales and also reaching out to more clients.
In the previous financial year NCIL made a big strategic more by acquiring IPC Packaging Co Pvt Ltd. IPC was acquired in November 2014. IPC Packaging Co. Pvt Ltd is based in Bangalore, the IT hub of India for the past 6 years and leading manufacturer of PP / HDPE woven FIBC, Jumbo Bags, sacks, Tarpaulins, Box Bags, PE Liner etc… IPC has a huge hi-tech production plant spread over 2.6 million sq ft which is located very close to the Industrial sector. IPC was and is being run by veterans with experience of over two decades. This acquisition puts NCIL at the top in its business with highest production capacity in india.
In addition to the technical textile business, Neo Corp also represents Indian Oil Corporation Ltd as Del Credre Associate cum stockiest for the state of Madhya Pradesh. There are two production lines of 300 KTA each for Polypropylene (PP) with Spheripol technology license from Basell, Italy. The product portfolio includes entire range of Homopolymers, Block Copolymers and Random Copolymers.
There is a dedicated HDPE plant of 300 KTA using Basell (Hostalen) slurry process. The product portfolio includes Unimodal as well as Bimodal HDPE grades for various application segments such as Film, Blow Moulding and Pressure Pipes.
The low petroleum prices will benefit to a great extent the company’s polymer business.
AWARDS AND RECOGNITIONS:
· Neo Corp enjoys the Star Export House status recognized by the Government of India for the Company’s excellent export performance.
· It has a Trading House Certificate which is valid for a period of 5 years which ends in 2019. A trading house is an exporter, importer and also a trader that purchases and sells products for other businesses.
· On 22nd September 2014 its Inhouse R&D Units recognization was renewed upto 31st March 2017.
· NCIL is also a member of the Flexible Intermediate Bulk Container Association(FIBCA).
All the above discussions depict Neo Corp has a huge potential for a great up move and will prove its mettle in the coming times.
Firstcall Research has given “BUY” call on Neo Corp with target 64:
