Sintex Plastics Research Report By Ventura + Investors Presentation
| Sintex Plastics Research Report By Ventura + Investors Presentation | |
| Company: | Sintex Plastics Technology |
| Brokerage: | Ventura |
| Date of report: | August 7, 2017 |
| Type of Report: | Initiating Coverage, Investors' Presentation |
| Recommendation: | Buy |
| Upside Potential: | 88% |
| Summary: | Company will revert to its growth trajectory considering the strong revival in various capex programs & adoption of welfare schemes by the government |
| Full Report: | Click here to download the file in pdf format |
| Tags: | Sintex Plastics Technology, Ventura |
| • Sintex Plastic makes prefabricated structures, custom moulding and storage tanks. • It will mirror the shareholding pattern of Sintex Industries, 30.63 percent owned by promoters as of June 30, according to data available on the BSE. • Sintex Plastic contributed 88 percent of revenues and 84 percent of earnings before interest, tax, depreciation and amortisation before the demerger. • The company will have two wholly owned subsidiaries –Sintex BAPL Ltd. and Sintex Infra Projects Ltd. • Sintex BAPL will house domestic and overseas custom moulding and the storage water tanks and allied plastic products businesses. • Sintex Infra Projects would hold the prefabricated structures, monolithic construction, and other infrastructure businesses. • Consolidated debt would be equally split between the two entities, according to the management comments, Antique Stock Broking said in a note to clients. • $110-million foreign currency convertible bonds would come on the books of Sintex Plastics Technology. We are optimistic about the company’s prospects, given that: • Revenues are expected to grow at 10% CAGR to Rs 7,770.3 crores by FY20 from Rs 5,810.6 crores in FY17, due to stable growth in the industrial custom moulding business, a turnaround in the pre-fab business, which had seen a negative growth rate in FY17 and a high growth rate in the retail custom moulding business. • FCCBs worth $67mn are expected to be fully converted into equity as we believe that post listing of Sintex plastics Technology Ltd, the combined value of both demerged entities (Sintex Industries and Sintex Plastics) would be way above the conversion rate of Rs 92.16 and hence, we believe that the bond-holders will try to capitalize on such large gains. • The return ratios of Sintex Plastics were way below that of its peers in FY17. However, we believe that the return ratios have bottomed out and expect ROE and ROCE to increase by ~120 bps and ~280 bps by FY20 to touch 14.7% and 14.2%, respectively. • We expect the company to bring down its total debt by Rs 558.1 crore from Rs 4061.6 crore in FY17 to Rs 3,503.5 crore in FY20 due to conversion of FCCBs and generation of positive operating cash flows in the coming years. |
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Hi.. Please your apdates in Hindi language.
Hi,
What about sintex ind too how long it will take to reach hundred and sintex plastic is gud or sintex I Wich is better investment for long term 6 months suggest any good penny stock for long term of power sector or other
Thanks and regards
Ajay kamble
You can look at Repro India at 500 levels, Rain at 120 levels, KCP at cmp, Orient paper and industries at cmp. All have big multi bagger potential. Orient has got demerger this year. KCP is a big value bet and company is at an inflection point. Repro has the best business model and is a monopoly biz. Repro books on demand is a big story. Rain is going very strong and will reach its fair value 7500cr mkt. cap soon. Post that as management deleverages the company can get serious re-rating and touch 20,000cr mkt cap. they are global leaders in their segment doing 10,000cr revenue and posting 400cr net profit inspite of making 600cr interest payment. Operating profits of some 1,000cr. Debt is there 6,000cr but this was due to acquisition of ruetgers. Operations have low leverage so no worries there. Management is planning for a US ipo and proceeds will be used tow pie off debt. They are restructuring debt in jan18 at favourable interest rates so that expense will flow straight to bottom line. Priya cement their cement division can be sold conservatively for 300m that business is debt free. They also hold some 120m in cash plus 160m in revolving credit so they can easily meet debt requirements. Once they drive up valuation they will list in US. Huge margin of safety in Rain..