manjushree technopack ltd (code 532950) - hbj capital's (mps unit) value pick stock reco of dec'09

8/9/2019 Manjushree Technopack Ltd (Code 532950) - HBJ Capital's (MPS Unit) Value Pick Stock Reco of Dec'09

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.MPSs Value pick stock for the month of Dec 2009

HBJ Capital, India

Web: www.hbjcapital.com

E-Mail: [email protected]

Call: +91 98867 36791


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Overview


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Basic Details

Manjushree Technopack is a packaging solutions provider with an experience of two and a half

decades in providing its customers with cutting edge plastic packaging solutions.

Few positives :

MT has been growing at CAGR of almost 25% for last 5 years. This growth rate is expectedto continue for next few years based on the aggressive expansions the company has been

undertaking. MT has an impressive client profile : Cadbury, Nestle, Coca Cola, P&G, Bisleri etc.

As per the recent announcements, the company has tied up with Coca Cola & Bisleri andis putting up exclusive capacities to cater to their requirements. As per the arrangement,the off take will increase 50% every year.


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Performance Income Statement Manjushree Tecnopack has grown at

a steady pace in the last 6 years. Itsgrowth rate has ranged b/w 25-30%.

The bottom-line has improved fromRs 1.37 Cr to Rs 7.49 Cr in the last 4years.

The good thing about the

interest cost escalate. They have beenfunding the expansion by giving anequal chance to all the shareholdersto participate

The basic EPS for the company standsat Rs 5.53 for 12 months endingMar09, while the CMP of Rs 32.5makes it available at extremely cheapvaluations.


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Quarterly Results

For the half year ending Sep09,the company has alreadyrecorded sales of Rs 66 cr. incomparison to Rs 51 cr. for thesame period ending Sep08.

For the same period its net

profit has increased to Rs 5 cr. incom arison to Rs 3.5 cr., thus

registering a growth of almost43%.

At an annualized basic EPS ofRs 7.4, the company is availableat a multiple of 4.4, which isquite cheap considering theconsistent growth it has beenregistering.


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Growth + Value pick As one can observe in the previous slide that theres an increase in

revenue for the half year ending Sep09 to the tune of 26% over theprevious year, while the bottom line has improved by around 43%.

During the year FY2008-09, the overall installed capacity of plant wentupto 21740 MTPA in view of expansion cum diversification projectcompleted during the year, as compared to 9120 MTPA during previousyear end. The major capacity additions have been for the manufacture of

PET Preforms to the tune of 11100 MTPA and the balance capacities havebeen added for the containers.

The company could only achieve capacity utilization to the tune of 39%for FY2008-09, as the major capacity additions happened towards the fagend of the year.

The company has now embarked upon further expansion to the tune of7000 MTPA, which will take the installed capacity to 28740 MTPA by theend of FY2011. So the total production can be ramped up from 8478MTPA (at the end of Mar09) to 21740 MTPA within 1 year, i.e. an increaseof almost 1.5 times.


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Conclusion

Thus, the additional capacity (already installed) will more than double the revenue, andprofitability may increase several fold.

The company at present is available at multiple of just 4.41, while if we take the additionalcapacity, and future earning estimates, the valuations become cheaper, making it a perfect fit forvalue pick and a proposed gain of more than 100% in the time frame of 12 months.


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THANK YOU

manjushree technopack ltd (code 532950) - hbj capital's (mps unit) value pick stock reco of dec'09

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