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SENSEX: 73651.35 655.04

NIFTY: 22326.90 203.25

Multi Baggers

Aashish Tater

5.30 AM Jan 1st 1970

Jindal PolyFilm

BSE ID : 500227     NSE ID : JINDALPOLY

RECOMMENDED PRICE 177.00

PEAK FROM RECO 1444.40 716.05%

CURRENT PRICE 452.35 Resource id #18

Jindal Poly Films (JPFL) is India's leading producer of flexible packaging films. Jindal Poly Films Ltd is a part of Rs 25 Billion B C Jindal Group, a 50-Year Old Industrial Group Offering a Wide Range of Products.

Jindal Polyfilms

About the company

The Next sector to outperform as they say "Acchay Din Aane Wale Hain" for the sector

Jindal Poly Films (JPFL) is India's leading producer of flexible packaging films. Jindal Poly Films Ltd is a part of Rs 25 Billion B C Jindal Group, a 50-Year Old Industrial Group Offering a Wide Range of Products. The Company operates the world's largest single location facility for flexible packaging films at Nashik, Maharashtra.

Jindal Poly Films Limited manufactures Polyester (PET) and Polypropylene (OPP) films. It has a highly skilled and efficient work force coupled with access to World Class Technology through group French company Rexor S.A.S. JPFL is India's largest producer of PET film and BOPP films. JPFL entered the metallizing business in 2003 and also has India's largest Metallizing capacity.

PET : Total Capacity is 127,000 tpa.
BOPP FILM : Total Capacity is 214,000 tpa.
Metalizer: Total Capacity is 63,360 tpa 

Important Triggers & Fundamental Perspective:

The entire sector will see better days ahead. All the cap-ex cycle has turned muted and we expect sharp increase in the profits of the business. Polyfilms as a business is cyclical in nature and the profits expands substantially as the upswings starts. The last time the sector saw Margin expansion the sector used to trade at a PE multiple of 8 times and PAT visibility of over 12% giving a PEG of 0.67. Post demand and supply dynamics that turned unfavorable in the BOPP and PET segment the stocks tanked to their old levels of consolidation.

We expect a stellar quarter from the companies in the sector, Pat in the quarter is expected to be 50% higher compared to entire PAT of last year.

Jindal Poly we expect PAT to be in the range of 48-51 crores for this quarter alone. Next year we expect full year PAT to be over 235 crores. The stock average PE multiple given it is the largest player works out to be around 8.6 times adjusting for the cyclical swing. Thus if we assume similar story to play for the subsequent year the stock will clock an EPS of over 50 for the next year. At the middle of the cycle the stock will trade and test 324 (EPS of 54@ 6 PE) zone that's when the next direction will set in. Looking for quick bucks here is the sector which says "Inke acche din aane wale hain"

In the same time keep tab on Cosmo Films and Polyplex all are expected to give similar returns

Disclaimer: Aashish Tater is an equity analyst and investment adviser based in Kolkata, INDIA. At the time of writing this article, he, his firm and dependent family members have no position in the stocks mentioned above. The author invites readers to send him email and welcomes comments, feedback & queries at query@fortunewizard.com. This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information/ article.

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