Plastics is a modern-day innovation, India is the 3rd largest consumer of plastic globally. Polypropylene compound products account for 62 percent of polymer consumption in the flexible packaging business, such as luggage. Furthermore, the luggage market has increased at a pace of about 13 percent per year over the previous ten years.
As per the KPMG report, Electronics demand has increased by an estimated 16% over the last five years, while plastic compound production prices have risen by 40% over the same period.
The plastic business has become a major driver of India’s overall growth, despite the fact that only a few corporations dominate the polymer production industry.
Here are two companies that produce Polypropylene compounds to finish plastic goods.
Kingfa Science & Technology Ltd:
A leading manufacturer and supplier of high-quality Reinforced Polypropylene Compounds Kingfa Science & Technology Ltd is engaged in the manufacture of all engineering plastics. And it is a global leader in modified plastics used in automotive and consumer products.
The company belongs to the small-cap category with a market capitalization of Rs 2,421 crore. Shares were trading at Rs 1,999.35 a share on June 21, down 1.80 percent from the previous close price.
The company’s revenue increased by 35 percent yearly, from Rs 1,047 crore in FY 21-22 to Rs 1,403 crore in FY 22-23. Net profit has grown by 170 percent, from Rs 30 crore to Rs 81 crore.
The stock has increased by 153 percent in the last year, resulting in a multibagger return spanning from Rs 788.70 to the present price.
As a result, if an investor bought Rs 1 lakh shares of the firm in the previous year, their holdings are now worth Rs 2.53 lakhs!.
The profitability ratios grew considerably for FY23, with ROE at 17.47 percent and ROCE at 24.65 percent. The operating margin increased to 8.27 percent, while the net profit margin was at 5.79 percent.
Safari Industries (India) Ltd:
Safari Industries is a significant producer of luggage and travel gear in India, with a 24 percent market share. The firm has recently boosted manufacturing of Polypropylene and Polycarbonate.
The company belongs to the small-cap category with a market capitalization of Rs 7,066 crore. Shares were trading at Rs 2,980 a share on June 21, up 1.05 percent from the previous close price.
The company’s revenue increased by 72 percent yearly, from Rs 705 crore in FY 21-22 to Rs 1,211 crore in FY 22-23. Net profit has grown by 468 percent, from Rs 22 crore to Rs 125 crore.
The stock has gained by 230 percent in the previous year by giving a multibagger return, ranging from Rs 907.30 to the current price,
Therefore, if an investor purchased Rs 1 lakh shares of the company in the previous year, their holdings would now be worth Rs 3.33 lakhs!
The profitability ratios grew considerably for FY23, with ROE at 29.38 percent and ROCE at 34.35 percent. The operating margin increased to 14.27 percent, while the net profit margin at 10.32 percent.
Written by Omkar C
