Key highlights

The company has sold 113921 MT of plastic goods in Mar 19 quarter registering a volume growth of 10% on YoY basis. For 12 months ended Mar 19, the volume growth stood at 7%.

During FY 19, the company had sold 38718 sq feet of premises and realised Rs 81 crore with operating profit of Rs 54 crore.

Focus remains to increase sale of value added products and improve ROC of the company. Value added products sale now stands at 35% of total turnover and stood at Rs 1944 crore for FY 19, registering a growth of 12% YoY.

Total borrowing stands at Rs 162 crore as on Mar 19 as compared to Rs 248 crore Mar 18 with average cost of borrowing at 8.23%. Debt Equity stands at 0.08.

For FY 19, the company had incurred capex of around Rs 384 crore for expanding the capacities of several units. For FY 20, the company envisages capex of around Rs 300-350 crore for creating capacities for future growth. Entire capex will be from internal accruals.

The GST introduction has lead to some shift from unorganised sector to organised sector, but the pace is moving slowly.

Expects net sales for FY 20 in the range of Rs 6100-6250 crore with OPM of around 13.5%-15% range.

The margins for Mar 19 quarter got affected due to inventory losses. The PVC pipes had gone down by around 15% in this quarter and the company was carrying high inventory. It was not possible to pass on the impact and the company had to bear the same. There are some more high cost inventories which the company is carrying which will be over in early June 19 quarter.

The product mix also was adverse in Mar 19 quarter with higher sales of pipes than the entire pipe solutions including fittings and spares.

Demand remains strong although election period did affect some sales. Once the election gets over, demand should come back strongly.

Margins have bottomed out in packaging products business which was at around 15.7% for FY 19 as compared to around 20.4% for FY 18.

The low polymer prices will eventually benefit the company significantly. Expects the trend of polymer prices to remain flattish to negative which augers well for the company barring a one off quarter of inventory adjustments.