This stock was discussed once in the thread "Top Mispriced Bets for next 6-9 months. 50% upsides? " I think it deserves an own thread.
Wim Plast ltd, a part of Cello group, is into making plastic moulded furniture and bubbleguard sheets. The moulded furniture segment contributes major part of the sales while contribution of bubbleguard sheet segment is fairly low at this point of time. Company is based in Daman, has strong consumer base throughout the country; and is under rapid expansion plans by setting up plants at Chennai and Kolkata.
Year FY08 FY09 FY10 FY11 FY12
Sales 70.71 91.97 130.52 158.05 201.47
PAT 3.12 8 17.01 18.25 22.75
5 Year sales CAGR > 30%
5 Year PAT CAGR > 60%
Q1FY13 - Sales up 40%, PAT up 53% (y-o-y).
ROCE > 30 & ROE > 20 and consistent.
Zero debt, Promoter holding - 74.98%
No equity dilution for last many years.
Stock was stuck around 200 levels for a long time, sharply ran up to 330 levels recently. There was a rumor(?) that promoters bought a few stocks from open market to make their holding 75%. This could be the reason for the recent rally.
But even at CMP 330, PE <8, stock doesn’t look expensive.
Disc : My views may be biased as I have significant holdings in Wimplast, allocation > 20%, which was accumulated around Rs.200. Not planning to exit/book profit at current level.
I have my 7-8 year old story to tell on Wimplast Ltd.I had a fascination to visit AGM of this Co as at that time Wimplast was earning only Rs.3-4 EPS but was distributing dividend every year Rs.3 to Rs.3.5 and hence visit to AGM.I first time visited to Wimplast AGM 7-8 years ago.As I was new I asked Auto take me to Cello factory from VAPI station.Auto driver had taken me to one factory of CELLO group which were making only TIP of ball pen at that time.Luckily Full board of Wimplast was on visit to all plant in VAPI-SILVASA area of for all group Co and hence I met promoters and visit some plant with board and then AGM.Group had more then 10 plants in VAPI at that time.
During my 1st AGM and after AGM while meeting and talking to them I got to understand reason for giving HIGH div and they promise that We are closing loss making depot and also moving out out of EAST INDIA due to poor quality competition on recycle and low weight chairs.Stock price was in the range of Rs.30-40 for full year.I invested as FD in Co.Over next 2 year Co closed few depots and started bubbleguard sheet business for making box for Apple and other fruit to transport but It became impossible to sell as RM price had increased by more then 50 % and hence finished product also.Again they solved this problem and created new use of that plant and made profitable this plant also.Within 3 years Co became debt free and they started again expansion in chair etc with new product range.During this 3 years I also came to know about their CSR activities in JAIN community and also for more then 6000 employees at that time in all other business.
So here was a co with all type of problem but confident to declare 100 % profit as dividend and also solve all problem as a best opportunities and hence investment in stock by me in this Co.
Now CO is on growth phase with INDIA growing in consumer sector and looks to me to be good for next 2-3 years as promoter has decided not to accept any debt but grow with internal accruals and give 20 % profits as dividend also as per last AGM.
They are exploring some new opportunities in some new related area for which they are tight lipped as per my meeting with CFO 2 months back.
Thanks for the insight into Wimplast. I have also held onto Wimplast and hope it continues to do well. Do you happen to know the segment wise break up of revenue? Has the bubble guard product done well in the market? I am unable to find this info on the web.
Two months back i met cfo at their corporate office.Cello bubble guard sheets contributes 25 percent to total sales.They are expanding bubble guard sheet capacities.In this segment there are two types of sheets one is Bubble guard sheets and Wimplast is the only company manufacturing Bubble guard sheets in India.Bubble guard sheets has multiple applications like Printing, packaging , floor protection , false ceiling etc.Of these Floor protector is fast moving and has good demand. Another one is Flute guard also has various applications and there are some more players in this segment.They indicate me that they are introducing various new products and exploring new opportunities.
Check this very good promotional video of Cello bubble guard sheets and it’s various applications.Potential is huge.
On the basis of Point and Figure charting I find that the stock has made a double bottom at 350. If this support is broken then next support is around 335-40 or at 320. This stock is bullish since April 2012 and consistently trading above the bullish support line. The stock is trading above its 50 DSMA of 346 and 200 DSMA of 250. Currently the stock is in sell signal. Wait for a change of signal.