Package deal

IPO REVIEW

Net profit2.7710.33-73.18 The yearly figures are the total of the erstwhile three
partnership firms, viz. Metro Poly Prints, Radha Madhav
Industries and Mayura Industries  For FY05, although sales grew by 47 per cent, operating profit declined by 66 per cent and net profit by 73 per cent.  Apart from a growth in raw material expenses, a 29 per cent rise in employee costs and a 92 per cent rise in manufacturing costs were also responsible for the same. However, competitors like Supreme Industries have been able to withstand the raw material pressures better than RMCL.  RMCL was formed in January 2005, acquiring the businesses of three partnership firms, Metro Poly Prints, Radha Madhav Industries and Mayura Industries. Thus, it is a new corporate entity, although it has been in the packaging industry for 7-8 years.  Agarwal adds, "Going forward, factors like urbanisation, more demand for FMCG packaging due to demand for smaller packs in rural areas, more number of working women who prefer packaged foods, increasing health consciousness and the growing economy would drive our business."  On an annualised EPS of Rs 4.4, the company has a P/E of 4.6x at the price of Rs 20. Its peers in different polymer and paper packaging segments, Supreme Industries and Paper Products trade at a P/E of 30.4x and 14.1x respectively.  Issue opens: December 12
Issue closes: December 16