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Market outlook and stock tip:-Wim Plast Ltd
Saturday, August 11, 2012
Story:Scripscan:Wim Plast Ltd
Story:To start with I love no brainers.It means where you don't even need to apply your brain to get your perfect scrip.Take the case of this week's recommendation-Wim plast.In the year 1994 the company setup manufacturing unit of plastic moulded furniture at Daman in which company got grand success in the business. In the process of diversification in 2005 company has setup plants at Baddi, Himachal Pradesh for processing of bubbleguard extrusion sheets and also moulded furniture which a new innovation in India in the field of extrusion technology.Presently the company has manufacturing units at Daman, Baddi and Chennai also have Depots in Gujrat, Rajasthan, Andhra Pradesh, Haryana and Punjab and have strong consumer base through out the country.Wim Plast manufactures, sells, and exports plastic furniture.Its products include molded chairs, stools, tables, and related parts, as well as bubbled guard sheet.It owns the cello brand which is a household name in our country and got a vast distribution network.While the company faces stiff competition from Supreme Industries and Nilkamal when it comes to moulded furniture, Wim Plast however has the distinction of being a monopoly player manufactures wall panels (Cello bubble guard board).These wall and false ceiling panels are manufactured by Wim Plast and marketed by Vista Plastech across the country(false ceilings,Cello bubble guard ceilings).These panels, made from 100 per cent virgin poly propylene, are ideal for use in offices, hospitals, hotels, warehouses, malls, homes and industries. Cello bubble guard wall panels have various advantages over other materials like gypsum board as these are water-proof, termite-proof, fire resistant, economical, maintenance-free and easy to install.The plastic products are still under-penetrated in India providing immense scope and vast opportunities in terms of plastic consumer goods.Visionary diligent promoters with good repute in the market gives much confidence and conviction too.Forget recession and other slowdown issues as its a play on our country's consumption.Cancell your high interest rate fears as it has no debt on its books.Have a quick smile as it has grown over 30% for the last 4-5 years and the trend is only expected to better going forward.The company last year has acquired a plant at Chennai which has helped them to cover the southern region and they are setting up a new plant in Kolkata which will cover the eastern region.The company managed its balance sheet well during the down years.In addition, the company has an above average ROE of 20%+, has been able to keep inventory and debtor levels low and improve the net margin during the last five yeartime period.Now lets have a quick glance through the last fiscal results.Wim Plast net profit rose 29.96% to Rs 6.81 crore in the quarter ended March 2012 as against Rs 5.24 crore during the previous quarter ended March 2011. Sales rose 43.76% to Rs 63.21 crore in the quarter ended March 2012 as against Rs 43.97 crore during the previous quarter ended March 2011.For the Audited full year,net profit rose 24.66% to Rs 22.75 crore in the year ended March 2012 as against Rs 18.25 crore during the previous year ended March 2011. Sales rose 26.10% to Rs 210.92 crore in the year ended March 2012 as against Rs 167.27 crore during the previous year ended March 2011.Wim plast should comfortably grow its topline(300crs) and bottomline(31crs) by 40% this fiscal.PE expansion would gradually take place and with its brand backing it would eventually move into a different orbit in the coming months and years.Promoters knowing it has been busy accumulating the shares from open market itself.They already own a hefty 75% equity in the company.I feel domestic consumption stories would get much attention from investors fraternity in coming days.Valuation wise too wimplast deserves a massive re-rating.The company has a very tiny equity of 6crs.It would deliver an EPS of over 50rs this fiscal fy12-13.Assigning a mere PE multiple of 7 times gives me a figure of 350(352 even figure for a 50% return) bucks.Thus taking all those points into consideration one should have it in the core portfolio .Keep it for ages to make huge money or else can also follow my assigned target.At 235rs or at a marketcap of 140crs its a steal.
Todays update:In just a matter of just 50 days, the company has hit the 50% return target of 352 rs and looks good for even more.From 235 bucks to 352 rs in just a matter of 1.5 months.Enjoy the ride members.
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