The company manufactures color & additive Masterbatches for the dope dyeing of man-made fibres (MMF), various plastic applications and engineering plastics & compounds. These are essential products required for textile and plastic products.

September 2018 quarter

In September 2018 quarter net sales rose 17% to Rs 92.01 crore. OPM fell 360 basis points to 5.2% which saw OP fall 31% to Rs 4.81 crore.

Other income grew 11% to Rs 1.51 crore and interest cost grew from Rs 5 lakh to Rs 18 lakh. After providing for depreciation, (Rs 77 lakh against Rs 82 lakh) PBT fell 28% to Rs 5.37 crore.

As taxation fell 34% to Rs 4.64 crore (tax incidence fell from 33.5% to 30.5%), PAT fell 24% to Rs 3.73 crore.

Six months results

For the six months net sales rose 7% to Rs 178.19 crore. OPM fell 320 basis points to 4.8% which saw OP fall 35% to Rs 8.63 crore.

Other income grew 6% to Rs 2.94 crore and interest cost grew from Rs 11 lakh to Rs 35 lakh. After providing for depreciation, (Rs 1.51 crore against Rs 1.57 crore) PBT fell 33% to Rs 9.71 crore.

As taxation fell 41% to Rs 3.73 crore (tax incidence fell from 32.0% to 28.1%), PAT fell 29% to Rs 6.98 crore.

FY 2018 results

In FY 2018 sales rose 2% to Rs 334.15 crore. OPM fell 90 basis points to 7.3% which saw OP fall 9% to Rs 24.29 crore.

PBT grew 1% to Rs 28.32 crore. As taxation grew 19% to Rs 9.22 crore (tax incidence grew from 27.7% to 32.5%), PAT fell 6% to Rs 19.11 crore.

Demand for the company's products is expected to grow

Due to India's low per capita polymer and polyester consumption, this segment is likely to experience an increase in demand. The company is a pioneer in the manufacture of masterbatches for the synthetic fiber industry, based on Polyesters, Nylons and Polypropylenes, for specialty and general purpose applications such as automotives, carpets, home-furnishings, apparels, non-woven fabrics, technical fibers, etc. It is expected that the demand for the company's products will grow manifold with the increased requirements of the polyester fiber industry

Has made in-roads into some of the world's largest masterbatch markets

The company has made in-roads into some of the world's largest masterbatch markets. The growth from export sales is expected to be around 10% per annum for the next few years. The company's thrust on the continuous development of new and innovative products will enable it to stay ahead of the competition.

Working on various smart products

The company is also working on various smart products to impart functionality in textile and plastic sectors. This can be a promising product segment for the company in future.

Valuation

The scrip trades at Rs 215.