Nov 19, 2012 03:36 PM IST | Source:

Buy Kalpena Inds; target of Rs 100: Sunidhi Securities

Sunidhi Securities is bullish on Kalpena Industries and has recommended buy rating on the stock with a target of Rs 100 in its November 16, 2012 research report.

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Sunidhi Securities is bullish on Kalpena Industries and has recommended buy rating on the stock with a target of Rs 100 in its November 16, 2012 research report.

“Incorporated in 1985, KIL has attained a status of largest manufacture of polymer compounds in India with an installed capacity of PVC compounds 30,000 MT, Silane based compound 40,000 MT, XLPE compound 12,000 MT, PE & PP filled compound 36,000 MT, Semicon compound 6,000 MT for strippable and nonstrippable applications. In additional to above, KIL is manufacturing speciality compounds and master Batches each 6,000 MT per annum. KCL's five plants are located at Kolkata, Falta SEZ, Daman, Dadra and Bhiwadi in Rajasthan. The quality of all products conforms to national & international standards. The products of KIL find application mainly in Cable, Packaging and Footwear industries.”

“During Q2FY13, net profit ballooned 53% to Rs9.0 crore on 42% higher sales of Rs315 crore. Q2FY13 EPS works out at Rs4.8. OPM and NPM stood at 5.6% and 2.9% against 6.4% and 2.7% respectively in Q2FY12. During H1FY13, net profit has gone up by 14% to Rs15.9 cr. on 38% higher sales of Rs589 cr. OPM and NPM stood at 5.6% and 2.7% against 6.8% and 3.3% respectively in H1FY12. H1FY13 EPS works out to Rs8.4.”

“KIL has been able to develop a number of products for domestic and international market such as Medium Voltage XLPE, Medium Voltage Semi conducting grades and also grades suitable for Pipes. KIL has always endeavored to keep pace with evolving technologies and give high customize solutions to customers. KIL has bought into effect new, efficient and speedy customer support and logistics to enhance customer relationship. KIL continued itself of being one of the leading market players in manufacturing of polymer compounds. KIL is confident of accomplishing volume growth and consequently the market share in very near future. KIL, being the only local player for Medium Voltage cables, enjoys possibility of achieving higher volumes and margins. The marketing team is making incessant effort for increasing the presence in overseas market. Increase application of polymers and performance polymers in the field of consumer durable, automobiles and also in alternative & renewable energy sector provide ample opportunity to KIL in the field of polymer and performance polymer to enhance its business.”

“In last 3 decades, KIL has attained the status of most respected Polymer Compounder in India. During these 3 decades, KIL has moved from producer of commodity compounds like PVC Compounds to High Performance Compounds like Medium Voltage Insulation and Semi Conducting grades. KIL has commenced full scale pre-marketing activities with its target customers so that the new flexible packaging plant once commissioned, would be able to deliver quality products to prospective customers in multiple segments in the shortest possible time. KIL has focused its attention towards development of products that have wide industrial application particularly in cable, piping, packaging and footwear industry. Higher level of capacity utilization backed by a strong volume growth, tighter cost control geared KIL to register notable performance in spite of a minuscule price increase. KIL has consciously been following a policy of steady growth in production for last several years. At the CMP of Rs75, the share is trading at a P/E of 4.1x on FY13E and 3.1x on FY14E. We recommend BUY with a target price of Rs100 in the medium term,” says Sunidhi Securities research report.

FIIs holding more than 30% in Indian cos

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