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The company held its AGM on 9 May 19 and was addressed by Mr. A Basu MD
Key Highlights
Flexible packaging industry as a whole will see radical changes in next 5 years. There is a phenomenal growth expected in both existing user industries and upcoming new opportunities. Some of the sectors that will drive the growth include foods and beverages, healthcare, personal care and household, tube laminations, labels and thermoforms.
CY 18 was a difficult year for the company where it faced turbulent issues of rising raw material prices, carrying high costs inventories, forex volatility and lower offtake. Expects CY 19 to be better. Expecting around double digit growth in net sales.
Product innovations and NASP technologies are driving the value added growth for the company. NSAP now accounts for around 25% of total sales which have better margins and higher customer retentions.
The company has 17 fully integrated manufacturing facilities with Pan India presence. The company operated at around 75% of installed capacity in CY 18. There is sufficient head room available for growth. Plans capex of around Rs 80 crore in CY 19 towards improvement of processes, reduction of overall costing and value addition in some products.
March 19 quarter saw significant benefits of ban of plastics and thus shifting towards company's flexible packaging and lower raw material costs with some inventory gains all leading to spurt in margins and earnings. The company was able to supply alternative recycled structures thereby providing options to the customers. Exports was also good compared to last quarter.
Exports for CY 18 were at around 22% of total sales as compared to around 25% for CY 17. Exports were down due to issue in African markets. The company is focusing more on building new markets in Latin America, North America and UK.
Ajanta Packaging was acquired in June 19 at price of Rs 90 crore and transition was completed smoothly during the year.
Tax rate will continue to hover around 40% in CY 19. From CY 20 onwards tax rate will move gradually to normal levels. From CY 21, normal tax bracket will apply.
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