This Microcap stock which operates in the business of manufactures and sells Plastic Articles and related products was in focus after the company announced production capacity expansion by 25 percent.
Price Action
With a market capitalization of Rs. 178.20 Crores, the shares of Prima Plastics Limited were up by 2.5 percent in the day’s trade touching a day’s high of Rs. 166 per share. The stock reiterated from the day’s high and was trading at Rs. 162 per share which is 0.03 percent higher than the previous closing price of Rs. 161.95 apiece. The stock has delivered a negative return of 1.30 percent and has underperformed the Nifty Index in the past year.
What Happened
The company had announced a production capacity expansion of Prima Dee Lite Plastics SARL in Cameroon which is the Joint venture of Prima Plastics to increase its existing production capacity from 16,000 MT to increase by 25 percent. This commencement of commercial production is from December 30, 2024. The investment amount for this initiative is valued at $9.06 Lakhs Lakhs (Approx Rs. 7.71 crore).. The existing capacity is around 65 percent. This expansion will be funded through internal accruals. The rationale for the expansion is to sustain growth and to meet market demand.
About the Company
Prima Plastics Limited was established in 1993. It is a leading Indian manufacturer and exporter of plastic products which specializes in molded furniture, pallets, and waste management solutions. They operate seven production facilities globally, including four in India and others in Cameroon and Guatemala. Their business model focuses on both B2B and B2C markets, catering to sectors like hospitality, industry, and municipal corporations. With a commitment to quality, Prima holds multiple ISO certifications and has been recognized as a One Star Export House by the Indian government. The company focuses on sustainable practices while expanding its product range and international reach
Financials & Ratios
The company’s Revenue from operations fell by 6.55 percent year on year from Rs. 46.66 Crores in Q2FY24 to Rs. 43.60 Crores in Q2FY25, accompanied by a profit of Rs. 5.28 Crores to a profit of Rs. 2.99 Crores.
In terms of Return ratios, the company has a return on capital employed (ROCE) of 16.86 percent and the return on equity (RoE) stood at 16.09 percent. The net profit margin
stood at 12.69 percent and the debt-to-equity ratio stood at 0.28 as of FY24. Shareholding Pattern
As of September 2024, the shareholding pattern with the promoter’s stake holding a share of 58.27 percent in Prima Plastics, and public holdings standing at 41.73 percent.
Written by Santhosh S
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