• Over the last few years packaging industry has emerged as an important sector driving technology and innovation growth in the country and adding value to the various manufacturing sectors including FMCG, textile, pharma and agriculture.
  • During the financial year 2019, company registered 17% growth in revenue. Sales volume grew by 5% with 10% growth in specialty films. EBITDA margins increased by around 8% as compared to last year, although BOPP film margins continued to be volatile and wiped out gains of volume increase and better product mix.
  • The company is strategically selecting its growth plan to enhance high margin value added films portfolio on one hand and to become one of the lowest cost producer in the world in selecting product categories on another hand.
  • With the growing trend for sustainability, brands are clearly focusing on recyclable packaging solutions for their products. Today we are partnering with some of the best global brands to offer structure rationalization and recyclability solutions.
  • The growth of the packaging industry is being driven by a number of trends such as the increased presence of global multinational companies, consumer brand awareness and products with ‘clean-label’ messaging that enhance brand transparency and builds purchasing confidence.
  • A number of significant trends are driving rapid change across the industry such as the increased presence of global multinational companies, consumer brand awareness and products with ‘clean-label’ messaging that enhance brand transparency and builds purchasing confidence. The demand for smaller and flexible packaging is also increasing due to increase in per capita income, urbanization and growing numbers of working women. Furthermore, the e-commerce industry in India has substantially expanded and is changing the packaging needs, driving requirements for versatile and visually appealing packaging solutions
  • Key focus areas for the financial year 2019 were – 1. Skewing Product Mix more towards speciality products, with consequently better margins and removing cyclability impact. 2. Continuous focus on improving Internal Operational Efficiencies including overseas operations. 3. Creating Customer Centric Culture including Robust Service Offer, New Offices Overseas, CRM, Establishing tripartite partnership between us, Converter and Brand Owners. 4. More & more green practices in manufacturing, more films enabling circular economy. Innovation led products. 5. Capacity expansion is planned in Value Add segment during financial year 2020.
  • Recent developments in speciality films have given opportunity to grow in the global market. The company is highly focussed on increasing its speciality sales by exploring the maximum opportunities available.
  • Brands are well personified assets and enjoy an image that the marketers are very conscious and sensitive about. It is hoped that several consumer packaged goods companies world over will opt to give their packaging designs a fresher look in line with the attributes that their brand stands tall for. One must not forget that ‘Good packaging protects your product while Great packaging protects your brand’
  • Key risks include Volatility in Raw material prices, currency volatility, emergence of competition in speciality films.

My view: The company had mentioned this: ‘Improving Product Mix towards Value Add, in line with objective to de-commoditize the business model.’ in their last years’ annual report. They have reported super quarterly numbers and price action is also strong. This could be a small cap worth looking at, after doing proper due diligence on promoters’ front.

Leave a Reply

Your email address will not be published. Required fields are marked *