What if you come across a company that has been growing at a three-year CAGR of 64 per cent in profits, has continued to post brisk growth in the first nine months of FY10, been a consistent dividend payer since 1998 and generates a dividend yield of over 2 per cent, has no debt in its books and is still available at a PE of just 6x? There are no prizes for guessing it right but here is your chance to grab Wim Plast (WPL) for long-term prospects, which we have chosen to recommend in this issue with its CMP of Rs 170. A fairly low profile company, its identity tag lies in the fact that it is a part of the Cello Group, which has diversified interests in manufacturing plastic household and thermoware, writing instruments (Cello pens), toothbrushes as also plastic furniture.

Wim Plast, the only listed entity of the Cello Group, reports its business under one segment, i.e. plastic moulded and extruded articles. It has products such as plastic moulded furniture and bubbleguard sheets with a strong presence in the western and northern regions where its market share is around 11-12 per cent. Other peers include Nilkamal and Supreme Industries with 20 per cent and 11 per cent market share respectively. The balance belongs to players in the unorganised market. The moulded furniture segment is a major growth driver for WPL while the contribution of the bubbleguard sheet segment is fairly low at this point of time. Bubbleguard sheets are a combination of three polypropylene sheets, which find applications in making false ceilings, tiles protection, construction, modular offices, etc.

Though on a ten-year horizon WPL hasn’t shown growth as one would have expected, things have begun to look brighter over the past three years during which time it has restored consistency and improved its progress rate. Its three-year CAGR of 64 per cent in bottomline and 14 per cent in topline is noteworthy. Besides, there is a sharp improvement in the margins, increasing by 584 basis points on account of aggressive marketing initiatives, increased distribution network, new products and better cost management.

« Start ‹ Prev | 12 | Next › End »