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Sunday, April 28, 2013

Wim Plast Ltd:-Go and own this Cello furniture

Stock idea:-

Scripscan:Wim Plast Ltd
BSE Code:526586
Buy range:340
Target:450
Duration:4-6 months

Quote:Wimplast was recommended at 200 odd levels during late 2012 with targets of 350 bucks.Not only did it achieved that but it went all the way to hit a level of 427rs.Owing to the present market volatility it has made a little southward journey with its stock price hovering now around 320-340rs mark.The reason to recommend the counter at this juncture is its recent commencement of its Naihati unit at West bengal.The same is set to boost its turnover and profits in the coming quarters.Also even on a valuation basis its quoting pretty cheap.With consumption play themes running wild,wimplast may well move to a different orbit in the coming few months.Make this a part of your core portfolio."Wimplast" has been and remains "one of my high conviction bets".

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 remains a new innovation in India in the field of extrusion technology.Even couple of years back the company's presence was limited to western and northern regions with units in Daman and Baddi.But fy11-12 changed the whole dynamics of the company.Wimplast started new manufacturing units in Chennai and Haridwar with an investment of 28 crore through internal accruals. The company’s new manufacturing unit in Kolkata has very recently commenced production(from march 15th). It 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 manufacturing wall panels (Cello bubble guard board).This wall and false ceiling panels are manufactured by Wim Plast and marketed by Vista Plastech across the country(false ceilings,Cello bubble guard ceilings).The panels are made from 100 per cent virgin poly propylene and 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.Cancel 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 couple of years back has acquired a plant at Chennai which has helped them to cover the southern region and they have "recently commenced production in Kolkata" which now will cover the whole 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 year time period.Now lets have a quick glance through the last fiscal results.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.It also paid a dividend of 6 bucks. During the year the Company has added new 25 range of products with multiple applications.These prospects the outfit of geographical areas throughout the Country and the Company will meet mass consumers with the number of range of premium products.Wim plast should comfortably grow its topline(280-300crs) and bottomline(29-31crs) by 35-40% this fiscal fy12-13.Fy13-14 on a most conservative estimate, it would grow 22-25%.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 well aware of the future posses the maximum permissible shareholding limit of 75%.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 65 for fy13-14.Assigning a mere PE multiple of 7 times gives me a figure of 450 bucks.Keep it for ages to make huge money or else can also follow my assigned target.At present prices its a steal.

btw:People looking for midcap/smallcap positional call professional service may rush a mail at my mail id arunsharemarket@gmail.com  to know more about it.

3 comments:

Anonymous said...

hi arun, sugar partialldecontrol not reflecting in PiccadillyAgro why? Can we hold this or exit?

Anonymous said...

yes

Arun Mukherjee said...

Ya definitely a hold.Piccadily should do well going forward.

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