DSIJ.in JULY 22 - AUG 4, 2019 I DALAL STREET INVESTMENT JOURNAL (^103)
involved in the manufacture of variety of items, gaining
prominence in different spheres of activity due to the increasing
per capita consumption. However, in spite of having a good
growth potential, the industry faces many challenges in terms
of environmental hazards, lack of advanced technology, limited
infrastructure, etc.
The Indian plastic industry has massive unrealised growth
potential indicated by very low usage of plastic as compared to
the global standards. At the same time, in the coming decades,
the industry has to encourage reasonable development by
investing in technologies that protect environment and inspires
growth, while balancing economic needs and financial
constraints. Also, the growing interest in green products,
healthier lifestyles and rising concerns on environment is
leading to a shift towards bio-plastics, which would be a
game-changer for the industry.
For the purpose of sector analysis, we have analysed 23
companies in the plastic industry according to their market cap.
During FY19, the aggregate sales of these companies grew by 7
per cent YoY. The aggregate operating profit of these companies
grew by 11 per cent YoY. However, their aggregate PAT de-grew
by 1 per cent YoY. Major PVC pipe maker, Astral Poly Technik
reported 19 per cent YoY growth in terms of its revenue and 21
per cent YoY growth in operating profit in FY19. PAT also grew
by 13 per cent YoY. The plastic major, Supreme Industries’
revenue increased by 13 per cent, whereas its operating profit
remained muted. PAT grew by 9 per cent YoY in FY19.
Finolex Industries also showcased robust performance with
jump in revenue and operating profit by 9 per cent and 25 per
cent, respectively, on YoY basis. PAT also jumped by 22 per cent
YoY in FY19. Essel Propack also posted healthy numbers with
jump in revenue and operating profit by 11 per cent and 7 per
cent, respectively, on YoY basis. PAT also jumped by 8 per cent
YoY in FY19. Kama Holdings delivered shining numbers with
jump in revenue, operating profit and PAT by 37 per cent, 48
per cent and 40 per cent, respectively, on YoY basis in FY19.
In the recent Union budget, customs duty on certain plastic
products has been increased from 10% to 15%. Also, basic
customs duty on PVC increased from 7.5% to 10%. This would
help the domestic plastic industry to further grow. The
government initiatives to boost rural infrastructure is pushing
the demand for PVC extrusions in the construction sector. The
market for pipes has grown by 12% CAGR since last five years.
Going ahead, the linkage of plastic waste business with
recycling business could create various opportunities for the
recycling companies. Moreover, the current low level of per
capita consumption, increased growth in the end-user
industries, higher penetration of plastics in various existing
applications and the ever-growing range of new applications
could further propel the growth of plastics in India.
14.62 12.08 8.43 19.07 21.47 12.67 21.02 19.16 18.96 16.23 11.98 11.98 11.98
35.31 33.98 33.88 12.92 -0.32 9.36 3.91 21.45 22.12 25.02 25.41 25.41 25.41
24.69 28.59 20.77 9.18 24.87 21.81 -13.67 11.35 17.70 15.55 124.10 124.10 124.10
6.11 10.91 12.11 10.65 7.37 8.46 -44.04 14.43 15.38 19.56 63.05 31.45 31.43
377.73 497.79 396.29 37.47 48.39 40.35 -24.12 24.17 29.17 29.65 6.45 6.45 6.45
0.41 0.41 0.73 -38.67 3.61 214.65 1.06 1.05 0.86 2.21 26.25 26.25 26.25
7.98 6.50 6.57 14.86 10.66 12.54 22.61 13.27 12.25 13.02 22.62 22.62 22.62
-0.11 -1.02 -0.79 6.43 6.83 NA NA 0.61 -0.82 -0.41 17.85 17.85 17.85
78.63 82.74 82.11 9.33 -10.88 -5.56 -4.97 12.36 14.73 17.40 14.92 14.92 14.92
43.46 43.00 48.25 17.02 12.57 3.02 1.08 7.62 8.21 9.91 72.21 72.21 72.21
49.85 72.44 9.08 27.36 48.00 105.43 -31.18 11.72 15.64 0.73 31.98 31.98 31.98
4.25 3.53 1.02 8.63 -2.76 15.08 20.34 5.12 4.23 1.47 103.13 103.13 95.89
19.46 42.81 77.16 -42.78 -27.90 NA -54.54 5.75 11.74 22.72 43.79 43.79 43.79
10.05 8.73 8.70 13.43 14.27 14.66 15.16 17.05 17.21 18.78 13.85 13.85 13.85
37.20 40.49 75.22 -10.20 -8.21 -12.09 -8.13 15.97 20.41 23.06 12.00 12.00 12.00
14.26 9.66 7.09 12.58 72.98 146.53 47.59 2.60 2.58 3.47 23.23 23.23 23.23
19.99 14.22 -0.23 23.43 19.11 8.48 40.60 21.54 31.13 -1.21 11.98 11.03 11.03
31.44 33.14 44.10 14.89 21.15 -5.15 -5.15 9.46 10.85 16.69 19.44 19.44 19.44
1.51 2.37 7.56 -14.90 -20.01 -30.43 -36.29 2.63 3.81 13.74 63.10 61.45 55.49
0.63 -1.28 0.55 24.69 64.49 487.57 NA 1.89 -3.78 1.66 41.70 41.70 41.70
23.03 13.99 21.03 28.06 50.08 42.86 64.63 10.64 8.33 20.03 5.19 5.19 5.19
2.39 2.46 14.07 13.38 30.87 -84.83 -3.13 3.41 2.84 12.27 59.41 59.41 54.47
2.17 2.77 1.21 12.91 8.44 28.49 -21.54 7.11 10.17 4.71 18.82 18.82 18.82
EPS () YoY Growth FY19 (%) RoNW (%) Equity ( in Cr.)
FY19 FY18 FY17 Sales Operating Profit PAT EPS FY19 FY18 FY17 FY19 FY18 FY17
martin jones
(Martin Jones)
#1