Polyplex Corp can move to Rs 275-300: Tulsian

Polyplex Corporation can move to Rs 275-300 in the next six- eight months time, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "Polyplex Corporation is the fourth largest thin polyester filmmaker in the world and they have their manufacturing presence in India, Thailand and Turkey. In December 2010 because of the robust performance of FY11 company has issued one to one bonus which led to equity increase to about 32.60 crore. In FY11, they have been selling their stake in their Thailand unit and bought their stake down to 51% to remain the majority partner."
He further added, "In my view they have taken the advantage of the robust business cycle prevailing at that point of time. They have realized quite a good amount of money from stake stale, which they have bought it down to 51%. Because of that we have seen an exceptional gain of about Rs 638 crore in the financials of FY11. That Rs 638 crore does not accrue entirely to the company because of the minority interest held by the other partners as well. Taking all this into consideration, the company posted and EPS of close to about Rs 330 on a face value of 10 for FY11 that was largely because of this exceptional gain of the stake sale."
"In the last couple of quarters there has been lot of volatility in the packaging film products in India as well as abroad also. In the last one month or so when talking to the industry guys they say that prices have now settled whatever profitability we are going to see for June quarter can easily get extrapolated for entire FY12."
"So, all the packaging film makers are supposed to be doing quite well from here on with not much volatility. Taking that into consideration, the company should be able to post a topline of close to Rs 2,500 crore plus with EPS of at least about Rs 100 on Rs 10 share. On conservative note, some slippage of uncertainty in the remaining three quarters EPS is not likely to fall below Rs 80. Right now the share is ruling sub Rs 200 that translates into a PE multiple of 2-2.5."
"The company is sitting on huge cash because of the stake sale they have. The consolidated cash balance in the books of company is close to about Rs 800-850 crore. So taking all these into consideration, the kind of revival in the interest of the midcap segments, the share looks quite good at these levels which can rise to maybe Rs 275-300 in the next six- eight months time."