*POLYPLEX* *CMP 725/-*
*The continuous uptrend in Poly-Film prices and latest estimates of sales from management in an interview on ET led us to revise out revenue and earnings estimates for company for FY’11. * · Polyplex corporation is one of the leading player in Polyster film industry in India as well as globally, *with subsidiaries in Thailand and Turkey , where in it owns 70% stake*. · It has *Polyster film capacity of 51,000 MTs in India , 58,000 MTs in Turkey and 42,000 MTs in Thailand* . In India , out of 51,000 capacity, *30,000 MTs line was commissioned recently in April’10.* This line has achieved 90% utilization recently in Aug.’10. So, *full benefit of this line will be available in second half only*. · *With Input prices stable and realizations on fire, margins are rising like anything*. The average realizations for June quarter were Rs 115/- while that *of Sept. quarter will go well above Rs 150*; and for next*Dec quarter this may be at or over Rs 200/- per Kg *. · As raw material prices are stable, *whole incremental rise in revenue may boost profits*, so Sept.’10 quarter results may be much better then June’10 quarter? Similarly the *Dec. & March quarter results will be much better then Sept quarter.* · The manufacturing units of company in all countries is *located strategically in Tax free zones and hence tax out go is minimum.* · This *very strong cash flow period will improve the debt profile and balance sheets of company* and thus the stocks should get re-rated. · *Thai subsidiary alone having market cap of appx. Rs 2000 Crs which is more then double of Parent Polyplex, which is at Rs 950 Crs*. Further, Stock is available at *less then 2X of cash generation of current year and less then half of FY’11sales*. * * *Industry is expecting more price rise, looking to strong demand and limited supplies. Industry expects this kind of situation till Dec.’11. So, party may go on for longer then expected. * *Based on present Poly film prices at Rs 200/- per Kg, Polyplex is likely to report EPS of over Rs 300/- for FY’11. We expect stock to be discounted at least by 3-4X, looking to significant improvement in cash flows and D/E.* *Thus we are revising our earnings estimates as mentioned above and price target range to be between Rs 900 in next couple of months and more in couple of quarters.* -- For Anything related with Stock market be Online at http://www.niftyviews.com/ Get free updates on your mobile phone. Sms "Join TSR " and send to 09223492234 FOR TRIAL STOCK/NIFTY/OPTION CALLS You received this message because you are subscribed to Google Group "STOCKRESEARCHER" group. To post to this group, send an email to [email protected] To unsubscribe email [email protected] for more info visit http://groups.google.com/group/STOCKRESEARCHER?hl=en-GB . This is Not a Spam Mail. Disclaimer :- "The opinions expressed by the members on this board are based on their individual experience and perceptions and to share information with other members with the best of intentions to help fellow members in investment decisions as equity investment is a risky venture."
