This company is in a cyclical industry. Money is made by investing while PE is high, margins are low and selling when PE is low and margins are high.
Dec 23 OPM is 3%, TTM OPM is 5%, where as at the peak of the cycle it was 25%. Did some basic google searches - Based on an article in TOI in Dec 22, in FY25 there will be an oversupply of both BOPP and BOPET. BOPP capacity would be 1300KT against demand of 1075KT. BOPET capacity would be 1200KT against demand of 940 KT.
Assuming above data is correct, there will be pain for another 4-8 quarters, however with most companies starting to report ~80% reduction or negative PAT, it will be interesting to see if companies will put the expansion on hold, or might run in to financial issues. If that were to happen, well run companies will be set for next up cycle.
Is any one tracking this industry?
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