Dalmia Securities is bullish on Polyplex Corporation Ltd has recommended buy rating on the stock with a target price of Rs 702 in its research report dated February 27, 2018.
Dalmia Securities' report on Polyplex Corporation
Polyplex Corp Ltd (PCL) is one of the world's largest manufacturers of thin Polyethylene Terephthalate (PET) film catering to Packaging, Industrial, Electrical & Imaging industry through its state-of-the-art manufacturing plants and distribution facilities in India, Thailand, Turkey and the US with market share of ~5% in the thin PET film. PCL has a capacity of 186,000 MT of thin PET film and 28,800 MT of thick PET film which forms majority of the capacity.
OutlookIn comparison to its peers too, PCL is available at inexpensive valuations of 0.9x FY20E EV/EBITDA, with Uflex, Jindal Poly and Cosmo Film trading at 4.0x, 5.4x and 7.4x FY17 TTM EV/EBITDA, respectively. Thus, on the back of good growth potential and inexpensive valuations, we expect the PCL stock to get rerated going ahead. We initiate coverage on the stock with a Buy recommendation and Target Price of INR 702, valuing the stock at 3x FY20E EV/EBITDA implying an upside of 38%.
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