“Polyplex Corporation “ Are Good Days Ahead?

"Polyplex Corporation " Is Good Days Ahead ???
A story which began 31 years ago in a small town in India, Polyplex today has manufacturing and distribution operations in six countries India, Thailand, Turkey, U.S.A., China and Netherlands with active sales in all major regional markets/customers across the globe. Our dynamic expansion is driven by an inspired vision to deliver increasing value to our customers, employees, shareholders and communities. ( http://www.polyplex.com/)
Being one of the leading PET Film manufacturers, Polyplex operates close to its key regional markets, with manufacturing and supply points across the world.
Gathered below points from screener.in
• The company reported very good profit in last 4 Quarters.
• Consolidated profit is increasing nicely Year on Year
21.23 Cr : 2003 -6.83 Cr : 2004 37.95Cr: 2005
29.04 Cr : 2006 248.40 Cr: TTM
• Dividend yield: 0.76 %
• CMP/BV ratio of 0.5 : one of the best in the sector.
• Market Cap1,266 Crores.

  1. Low return on equity is the negative point.
  2. Not sure how to value this company with too many overseas subsidiaries.

Though Polyplex Corporation share is trading @ 52 weeks high of Rs.419.50 , for me it looks like lot of value in the share.
Disclosure: Currently Polyplex Corporation is 4.5% of my overall equity investment portfolio, holding since last 7 months.


I had first invested in Polyplex about 2 decades back. I found the management manipulative and financials not predictable due to competition.


Added more details about company below:
Since inception in 1984, we have grown from a small single-line facility at Khatima in the foothills of the Himalayas in India, into half a billion dollar multinational presence with manufacturing and distribution facilities in India, South-East Asia, Europe, the Americas and China.
The Polyplex model of expansion moves us closer to our regional markets to deliver more efficiently and cost-effectively to our customers. Our fully integrated green-field film lines with upstream resin plants and downstream metallizers and other offline coating capabilities ensure cost-competitiveness, minimized environmental impact besides bringing the advantages of a single-point supply for a portfolio of film products to our customers.
Having begun with a single PET thin film line of 4,000 tons per annum in India, Polyplex emerged as one of the largest global producers of thin PET film in the decade after the turn of the millennium.
By 1996, Polyplex was producing 20,000 tons per annum in India and had backward integrated with capabilities to produce PET resin to feed captive requirements. In 2009, to meet the growing domestic demand for PET film, Polyplex added a state-of-the-art 8.70 meter wide thin PET film line, a PET resin plant and a metallizer at its new manufacturing facility in Bazpur, near Khatima. The present capacity of the two Indian operations is 55,000 tons per annum of base PET film including capability to produce intermediate thickness upto 150 micron.
In 2003, with the strategic objective of adding capacity closer to one of its main regional markets in South-East Asia, Polyplex set up a new plant with a capacity of 21,000 tons per annum at Rayong, Thailand through its subsidiary Polyplex (Thailand) Plc (PTL). In the same year, PTL added a second thin PET film line with a similar capacity and followed it up in 2004/2005 with the commissioning of a batch-process resin plant and a continuous-process resin plant, thereby making it completely self-sufficient in PET resin. In 2013, PTL has set up a Thick PET film line and batch resin plant in Rayong, Thailand adjacent to its existing facility with an annual capacity of 28,800 MT for the film plant and 28,000 MT for the resin plant.
In 2005, Polyplex extended its manufacturing footprint into Turkey, moving closer to the European and Mediterranean markets and firmly establishing Polyplex as a global company. Through its subsidiary Polyplex Europa (PE), a facility was set up in the European Free Zone at Çorlu, Turkey.
PE began with a thin PET film line with a capacity of 29,000 tons per annum and in 2006, a continuous process PET resin plant was added for meeting its captive requirements. Two co-generation power plants of 4 megawatts each were installed to provide greater power security for the facility. In 2008, a second thin PET film line with a capacity of 29,000 tons per annum was commissioned, taking the total capacity to 58,000 tons per annum of base thin PET film.
USA accounts for about 14% of the world’s consumption of thin PET film and has, since the 90’s, been a significant market for Polyplex. In 1996, Polyplex moved closer to its North American customers through Spectrum Marketing, Inc., a joint venture based in Fort Worth, Texas, for warehousing and distributing Polyplex products. This entity was acquired in 2006 and renamed as Polyplex (Americas), Inc. In view of the growing American market demand and the absence of new PET film capacity, Polyplex decided to invest in USA in 2011.Polyplex USA LLC was incorporated and a green-field facility comprising a thin PET film line was started in April 2013 in Decatur, Alabama followed by the PET Resin plant in July 2014. In July 2012, Polyplex has acquired some metallizing assets located at Austell, Georgia and have relocated most of these assets to Decatur, Alabama while some been shifted to other group locations. With effect from January 31st, 2013, Polyplex (Americas) Inc. has been merged with Polyplex USA LLC, Alabama.
In 2009, addressing the strategic need to establish a long-term presence in the fast growing Chinese market, Polyplex incorporated Polyplex Trading (Shenzhen) Co. Ltd. as a distribution entity in China.
In September 2013, PE incorporated a 100% owned distribution subsidiary in Turkey by the name of POLYPLEX PAKETLEME ÇÖZÜMLERİ SANAYİ VE TİCARET ANONİM ŞİRKETİ to facilitate better market reach in local Turkish market.

Innovating to simplify product sourcing, improve services and reduce costs for our customers, Polyplex has continuously added downstream facilities to offer an expanded product portfolio that includes Metallized films, Siliconised Polyester Release Liners, Extrusion Coated films and Chemically Coated films.
In 2002, Polyplex restructured the polyester industry value-chain and set a global benchmark for efficiency by commissioning an in-house metallizer at Khatima with a capacity of 4,800 tons per annum. This was followed by adding 3 metallizers at Rayong, 2 at Corlu, 2 at Bazpur and some metallizing assets in USA through acquisition. In order to augment the capacity as well as portfolio of Metallized films, the Company has added two new metallizers at Thailand & Turkey . With these installations, the total capacity of metallized film stands at 71,500 tons per annum.
To deliver similar benefits to the Pressure Sensitive Adhesive industry, a state-of-the-art silicone coating line with an annual capacity of 160 million sq. meters for the production of sophisticated Siliconised Polyester Release Liners was commissioned at Khatima in 2007. To meet the growing global demand, a second silicone coating line with a capacity of 500 million sq. meters was commissioned at Rayong in 2011.
In April 2008, an Extrusion Coating line with an annual capacity of 150 million sq. meters for the production of Thermal Lamination film was commissioned at Rayong, Thailand. A second Extrusion Coating Line with an annual capacity of 215 million sq. meter has also been commissioned at Rayong, Thailand in June 2013.
With the objective of enhancing its Product Portfolio, Company commissioned an offline coating line in Turkey in Q4 FY 2013-14 with another line in India started in Q2 FY 2014-15.
In April 2013, Polyplex expanded its market presence in the EU by setting up a wholly owned distribution company in Netherlands named Polyplex Europe B.V. The distribution entity is fully owned by Polyplex (Thailand) Public Company Limited (PTL). This new entity is strategically formed to address the needs of our customers for value added products.
Polyplex has set up a recycling unit in Thailand with a capacity of 3000 MT per annum in order to provide sustainable solution for film based process waste.
Polyplex has invested into the fast growing beverages market in India through its subsidiary Peninsula Beverages & Foods Company Private Limited (PBF) which is a wholly owned subsidiary of Polyplex (Asia) Pte. Limited, Singapore (PAPL). PBF is in the business of product development, brands, marketing, sales and distribution of packaged beverages and food products which is a significant and fast growing category in the consumer products space.

Global Presence
A story which began 31 years ago in a small town in India, Polyplex today has manufacturing and distribution operations in six countries India, Thailand, Turkey, U.S.A., China and Netherlands with active sales in all major regional markets/customers across the globe. Our dynamic expansion is driven by an inspired vision to deliver increasing value to our customers, employees, shareholders and communities.

Recent update

Here are my two cents about this stock. Disc: Invested
I think there are good days ahead.

'- Polyplex

  • Very Low EV/EBITDA of 2.61 (Lowest in Industry)
  • PE of 5.82 among the lowest in the industry considering earnings growth
  • FY16 ROE is at 1.25% which is improved to circa 10.64% in FY17 (discounting significant changes to BS)
  • FY16 ROCE is at 0.78% which is improved to circa 6.72% in FY17 (discounting significant changes to BS)
  • Cash is almost equal to Market Cap - Strong Balance Sheet
  • FCF Yield at 33% - Sign of undervaluation
  • FCF to EPS at 159% - Earnings are backed by FCF
  • Very low P/B of 0.48 - High margin of safety
  • Price has not caught up to earnings, PE dropped from 5.83 to 4.79 between Sep and Dec 2016
  • Management is good
  • Dividend Paying company .32 Yield
  • Considerable drop in Capex and Debt over the last 2 years
  • Positive Free Cash flow for the last 2 years (improved YOY)
  • Very low PEG ratio of 0.02
  • 50 Day SMA above 200 day SMA (on the Technical side)
  • Very low Price to sales ratio of 0.4
  • Positive Earnings growth over the last 3 years
  • Disinvestment from loss making subsidiary (Beverages)
  • Positive EBITDA Growth for the last 3 years
  • Considerable size, 4th largest producer of THIN PET Films in the world
  • Good Geographic spread, IN, Turkey, Thailand and US

Management Talk:

  • Broadening of product range and customer engagement together with stabilization of new capacities built in the last 3 years will have a positive impact on profitability despite persistently tough market conditions.
  • Over the last couple of years, the Company has concentrated its efforts and resources on consolidation and operational improvement
  • The financial performance does not fully reflect the impact of these actions as profits were weighed down by non-operational and non-cash charges towards foreign exchange fluctuation losses on loans in the overseas subsidiaries as well as a one-time impairment provision and deferred tax reversal in US operations

Some additional thoughts.
Its subsidiary listed in Thailand is trading at 9+ P/E
Polyplex holds 51% stake in its Thai Subsidiary which itself amounts to circa 12k crore INR valuation, the parent company however trades at just over 13k crore mcap.
This industry ran into over capacity issue and a double whammy of low realization due to crude price drops. If you see the sales have still remained flat which signifies significant revenue growth underpinning the numbers.
Management is of IIT pedigree. This stock enjoyed operating margins in the range of 20% back in 2010 before the over capacity glut so there is a lot of potential to improve margins from here on.

Looking forward to Q4 & the Annual reports which should bring more clarity.

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I see that their borrowings has reduced in FY16 and so is the Fixed assets.
Are they selling them to lower the debt?

do they enjoy any moat in their sector?

Film business has no moat. It is a commodity. I have seen it over last two decades.

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This is epitome of undervaluation. Moat or no moat, just on the back of current EPS, stable ( if no) growth, huge cash on balance sheet, this will provide good return in medium to long term for sure.

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Just to play devil’s advocate, cash on BS isn’t necessarily always good. It can also mean that the business is not able to utilise that money in the business. Or are they looking to acquire/buy another smaller company? Not that I have heard of.

Btw their subsidiary has decided to setup a plant in Indonesia-

Disc- invested and want to add more but will wait for results

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Was going through the AR 16-17. Haven’t completed reading it as yet, however I stumbled upon something while digging information (while googling and other links which I am going to provide below) of Mr Sanjiv Saraf (the Chairman) and the management team.


This link mentions that “The
company is promoted by Mr Rohit Saraf (brother of Mr Sanjiv Saraf, the promoter of the Polyplex Group)”

Now if one googles Mr Rohit Saraf’s name one of the link that turns up is-

Also, Dr Suresh Inderchand Surana (who is an independent Director at POLYPLEX) "served as a Director of Facor Alloys Ltd. until October 30, 2006"

Now assuming that Mr Narayandas Durgaprasdji Saraf is his father, and if we google his name then-

And Facor steel has been recently listed/declared a shell company-

Now, it is no way to say that Mr Sanjiv Saraf just because his brother Rohit Saraf and Late father Narayandas Saraf were involved in wrong economic activities, is also of similar nature but this maybe something to ponder upon.


Any particular reason for you to find the management manipulative??

P.S- please forgive me for-

-overthinking in this aspect.
-if the post has been presented in a confusing way

Disclosure- currently invested and was thinking to add further. However, waiting for further views


Technically It has given mutli year break out at 490 levels .
Current P/B Value is 0.72 ,
FY17 book value per share (Rs) Target : 744

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@jitenp Dear Sir, have read some of your posts and have high regards for your thought process. Some where I read you are interested in Polyplex Corp. Any info or thoughts you can share w/respect to the promoter and some information that was dug up by me w/respect to his brother and other subsidiaries?


Dalmia securities has recently published buy call on Polyplex. Report is as attached.

28-02-2018- Dalmia Sec.pdf (940.3 KB)

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The thai subsidiary has a market cap of 14.94 billion baht,works out to about 3000 crore.Polyplex corp has a stake of 51 percent ,directly of 16.5 percent and indirectly through a wholly owned subsidiary polyplex asia pte ltd of 34.5 .Total value of shares works out to 1530 crore.Now we need to apply a holding company discount of 30 percent,which puts the total value of holding at around 1000 crore.

The funny thing is CARE has a A rating to its debt instruments.

I am thinking of putting my money in.

Disclosure:Not invested.

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You are not overthinking at all.You have made a valid point and yes narayandas durgaprasad saraf is the father of rohitkumar saraf.The company looks cheap ,but the promoters dont inspire confidence.If they can cheat people on land they can cheat shareholders too.

Disclosure :Not invested


2018 polyplex analysis
Hi everyone,
i have just started with the process of analyzing companies; below is my analysis of Polyplex Corp, please share your valuable inputs on the analysis;

Polyplex Corporation
About Company:

  1. Manufactures PET film
  2. Customers in 70 Countries
  3. operation in 6 different countries


  1. Manufacturing Facility closer to regional market
  2. expected CAGR of 7% in food packaging industry
  3. Emerging demand from Asian countries like India, China and SE regions
  4. New Manufacturing Facility in Indonesia
  5. Backward integration of manufacturing for greater efficiency
  6. top five global producers and plastic film manufacturers of thin PET films


  1. Growing alternatives of food packaging
  2. Mature American Market (Polyplex have presence in US)


  1. Great Positive Cash Flow from operations (around 440 cr in 2017)
  2. P/E=11; low as compared to industry (5 year EPS growth 18.7%)
  3. (Debt/Equity) Ratio=0.84 (Not that great)
  4. Sales growth for past 3 years=.37% (dismal rate)

with the presence of manufacturing facility in SE Asian region, the company can show good growth rate in the future, but it has to make some rationing for R&D in order to compete with the alternative products.

Please share your view on the analysis above, what should i incorporate more to get better picture of the company investment scene.
Need help from seniors @Donald @hitesh2710 @bheeshma


I just checked on screener.in, and the PE seems to be 5.72 and the D/E 0.34.

How did you get the higher numbers?

Hi tamnay,
i got the data from investing.com screener, its 10.7 there.

There is a huge cash in the books. But what is puzzling is there is also a huge debt in the books as well. Per latest annual report the long term borrowing is ~255 crore. As per notes section most of this is in foreign currency. The short term borrowing is 484 Crore. Most of this short term seems to be for working capital requirements. Creates some doubts as why such huge borrowing if there is such a huge cash.

The interest income from Financial Assets is 29 Crore as per the notes section in AR. The Interest expense ans other borrowing expense is 39 Crore. Clearly the higher cash in Balance Sheet is earning less than the debt expense in Balance sheet. Why not pay off the debt?

This could otentially be another “curious case of Polyplex corporation”


The figures appear too good to be true.

In the consolidated figure the Company is having

a) Other Financial Assets (10) Rs 278.48 Cr
(Fixed Deposit with Banks (Refer note 44)

b) Cash & Cash equivalents (16) Rs 333.70 Cr

c) Bank balances other than above (17) Rs 449.94 Cr

Total cash a+b+c = 1062.12 Cr

Borrowing Long term Rs 245.48 Cr
borrowing Short term Rs 418.75 Cr

Total Rs 664.23 Cr

Why is Company carrying debt of around Rs 664.23 Cr when it is having cash of around Rs 1062.12 Cr in its book.

Net Enterprise value : Rs 1000 Cr
Last year Consol EBIDTA Rs 890 Cr

Disclosure : Not invested but tracking if the story is worth…