Microcap stock engaged in the business of plastic packaging manufacturing jumped 8 percent in the day’s trade upon entering into a Memorandum of Understanding (MOU) with Saeed Ghodran Group to establish a Joint Venture Company to jointly invest and trade in related products
Price Action
With a market capitalization of Rs. 179 Crores, the shares of HCP Plastene Bullpack Limited were trading at Rs. 167.90 per equity share, up 6.60 percent from its previous day’s close price of Rs. 157.50
What happened
HCP Plastene Bullpack Limited has entered into a Memorandum of Understanding (MOU) with Saeed Ghodran Group, Saudi Arabia, to establish a Joint Venture Company in the form of a Limited Liability Company and invest 50 percent Equity Capital, to set up a Factory to Manufacture Bopp Woven Bags and Jumbo Woven Bags.
The main purpose of this Memorandum of Understanding is to jointly invest and trade in related products, to enable the initial startup of operations to import and sell finished products, and then import and sell semi-finished products that are converted into finished products in the Joint Venture Company.
In addition to that both parties agree to cooperate and invest in trading in any product that can be imported from India and/or exported to India as part of growing the relations and leveraging the strength of both Parties in their local markets by way of this Memorandum of Understanding.
As per the terms, Saeed Ghodran Group will provide technology, technical, and operational services including machinery and semi-finished materials for production, know-how, technical training, and marketing support for the Joint Venture as mutually agreed.
About the company
HCP Plastene Bullpack Limited is engaged in plastic packaging manufacturing, it deals in FIBC Jumbo Bags, PP Woven Sack Bags, PP Woven Labels, Multi-layer film, woven fabric, and related products. It serves various industries, including minerals, food grains cement industry, cement, polymers, sugar & salt, and agriculture & fertilizer.
Financials and Ratios
Its revenue from operations declined by 16.99 percent from Rs. 15.42 Crores in Q4FY23 to Rs. 12.8 Crores in Q4FY24, accompanied by losses of Rs. 1.67 Crores to Rs. 0.13 Crore.
In terms of Return ratios, it has reported a return on equity (ROE) of 10.60 percent and a return on capital employed (ROCE) of 5.80 percent. It has reported a high debt-to-equity ratio of 3.19.
Written by: Bharath K.S
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