Key Highlights

Company manufactures all types of master batches be it white, black, and additive and specialty ones. In India, organized players and unorganized sector are more or less equal, although organized sector is able to increase its market share. Plastiblends India has a market share of more than 20% in India.

User industry for company's products includes packaging, plastic products, pipes, films, woven sacks etc. So some of the reputed names like Supreme industries, Jain Irrigation, Garware group, Astral Poly Technik, Finolex group etc, are customers of the company.

The current capacity is 75000 MTPA. The capacity can be interchangeable to produce any type of master batches.

Volatility in rupee, raw material prices particularly the polymers and pigments etc are major reasons for margins remaining under pressure in FY'13. However, the company was able to pass on the entire rise to its finished products and also with company becoming a net exporter, rupee is favoring them. In H1 FY'14, operating margins went to double digit and management expects margins of around 9.5-10% to be sustainable. There is a forex gain of about Rs 3 crore in H1 FY'14 results.

The share of Specialty Master Batches is increasing in the overall share of master batches for the company. This helps in increasing the margins.

The prices of finished goods are revised at least once in a month. However the end demand and the pace of change of raw material would play a role in to what extent the fluctuations needs to be passed on. There are no long term contracts with the customers. Similarly there are no long term contracts for raw materials as well. They are sourced either domestically or are imported.

The Company exports to various countries like Middle East, Africa, and SAARC & CIS countries. The company is continuously able to increase the share of exports as a % to total sales. 2 year's back the share was about 20% which has increased to more than 33% in H1 FY'14.

At present there are no firm arrangement with any MNC for a confirmed off take. Domestically, the company does contract manufacturing work on behalf of Reliance Industries.

The company will continue to ensure a payout ratio of at least 30%. Management expects the business momentum to continue for the rest of the quarters of the current year. Exports will continue to increase.