Shares of this Polyester Films manufacturing company jumped 6 percent in Thursday’s trading session after entering into a joint venture with Loop Industries. On a YTD basis, the shares have delivered more than 30 percent returns to its shareholders.
With a market capitalization of Rs. 1,048 crores, the shares of Ester Industries Ltd started Thursday’s trading session on a higher note at Rs. 119.90. During the trading session, the shares hit a high of Rs. 131, gaining 6 percent and closed the day at Rs. 125 apiece.
Such a positive movement in the share price was observed after the company in an exchange filing announced that they had entered into a Joint Venture Agreement with Loop Industries Inc for the purpose of engaging in the business of manufacture of DMT and/or MEG through depolymerisation of PET and/or Polyester waste using patented Loop technology.
The purpose of the joint venture is to build and operate an Infinite Loop India manufacturing facility that will produce a unique product offering of lower carbon footprint recycled dimethyl terephthalate (“rDMT”), recycled mono-ethylene glycol (“rMEG”) and speciality polymers in India, using the Infinite Loop technology which offers significant advantages over traditional mechanical PET recycling.
Furthermore, the company mentioned that the Infinite Loop India facility is expected to produce 70,000 tonnes of rDMT and 23,000 tonnes of rMEG annually and will toll convert the rDMT and rMEG into various grades of speciality polymers.
Additionally, the company highlighted that the establishment of the Infinite Loop India facility signifies a strategic extension of product offerings within a cost-effective manufacturing setting, synergizing with Loop’s current PET plastic and polyester fibre manufacturing ventures.
Moreover, this initiative broadens the accessibility of Infinite Loop technology to diverse markets and clientele across various sectors, encompassing electronics, automotive, textile, cosmetics, and packaging industries.
The entire project cost is expected to be approximately USD 165 million and the same will be funded through the appropriate mix of debt and equity.
Coming onto the company’s financial statements, the revenue increased by around 3 percent from Rs. 261 crores during the September quarter to Rs. 268 crores in the December quarter. On a contrasting note, the net losses increased from Rs. 30 crores to Rs. 45 crores during the same period.
Regarding key financial metrics, the company reported a return on equity (RoE) of 20.79 percent and a return on capital employed (RoCE) of 7.77 percent for the period spanning FY22-23. Additionally, the net profit margin stood at 14.94 percent during the same timeframe.
Headquartered in Gurgaon, Ester Industries was incorporated in 1985. The company manufactures a variety of products, including Polyester Films, Specialty Polymers, and Engineering Plastic compounds. These products find applications in various industries, such as Food Packaging, Home and Personal Care and more.
Written By Vaibhav patil
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