Polyplex Corporation

A sustained buoyancy in demand for polyester film from export markets enabled the company's sales to grow 17 per cent in the year to March 1996. During the year, Polyplex shifted its focus to export market instead of domestic. This strategy paid off, with exports registering a 233 per cent rise to Rs 58.19 crore in 1995-96, from Rs 17.47 crore in 1994-95. On the other hand, sales in the domestic market declined to Rs 29.96 crore from Rs 58 crore. Thus, exports share as a percentage of total sales, rose from 25 per cent in 1995 to 69 per cent in 1996. With the commissioning of several new plants, the domestic market is likely to be hurt by overcapacity. To provide a measure of stability in volumes and price realisation, the company has entered into long-term supply contract with overseas buyers. It has set up a marketing division in USA. The company, which has the best profit margins in polyester film markets, recorded a marginal fall in gross profits margin (GPM) to 35.2 per cent from 35.7 per cent. Since the import component in total raw materials expenses constitute about 60 per cent, wide fluctuations in the foreign currency markets hit the company's profit margins. The company's project to manufacture 9,000 TPA of second polyester film line was commissioned in March 1996, while the work on 15,000 TPA polycondensation facility is expected to start in October 1996. The One MW thin film solar photovoltaic manufacturing facility is likely to commence commercial production next month.

 

Market price: Rs 34.80; EPS 19.10; P/E: 1.8