Scripscan:Ester Industries Ltd
cmp:15
Code:500136
Story:Company produces PET films and Engineering plastic, forwhich domestic demand is growing at more than 15% p.a. Company’s utilization levels are currently more than 100% for PET film and around 100% for engineering plastic. Thus tomeet growing demand, company is planning to expand capacity of PET film from 30,000 Mts to 57,000 Mts by the end of 2010 and also planning to raise Engineering plastic capacity from 3,600Mts to 11,000Mts. Expansion is mostly funded from internal accruals and debt.(No equity dilution is contemplated).Company also has more than matching capacity of PET chips,which is and intermediate product. Last year performancewas affected due to volatility and high prices of the raw materiallike PTA and MEG. But now the raw material prices have stabilized and better realizations are leading to healthy margins for the company. Better performance is expected tocontinue as the realizations are better and the input costs havecome down. Most of the sales are to the domestic markets[75%] catering to FMCG segment where demand is strong at 20-22% [and least affected by any slowdown], rest is exported [25%]. Outlook for the current year and the coming year looks promising with company expected to achieve sales close to 500 crores and profit after tax close to 45 crores for 2010. Current years earnings could be close to Rs 8 and thus discounting present stock price by around 2X and offers scope for appreciation looking to growth potential.A decent buy.
Friday, December 18, 2009
Important Disclaimer&Privacy policy
This blog does not share personal information with third parties nor do we store any information about your visit to this blog other than to analyze and optimize your content and reading experience through the use of cookies.You can turn off the use of cookies at anytime by changing your specific browser settings.This privacy policy is subject to change without notice and was last updated on 20.3.2013. If you have any questions, feel free to contact me directly here: arunsharemarket@gmail.com
Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.
