Review By on September 17, 2018
Ksithij Polyline is in the business of manufacturing and distributing of I.D. Card Products, Binding & Lamination equipment, related materials & accessories, and Stationery Products. They began operation in 1998 and are currently operating out of a manufacturing facility at Dadra and Nagar Haveli. They are also involved in the export of products to countries like Uganda, Lebanon, Sri Lanka, South Africa, Bhutan, Nepal, Dubai etc.
The top line was largely growing at a slow pace until FY17 and then the company’s revenue jumped from 17 Cr. to 27 Crores in FY18. Profits too were hovering at around 20 lakhs during FY17 and then made a five-fold jump the subsequent year taking the sum total to 1 Cr in FY 18.
|
Particulars(in Cr) |
FY18 |
FY17 |
FY16 |
FY15 |
FY14 |
FY13 |
|
Revenue |
27 |
16 |
15 |
12 |
12 |
13 |
|
PAT |
1 |
0.2 |
0.2 |
0.16 |
0.11 |
0.08 |
|
PAT Margin (%) |
3.8 |
1.6 |
1.2 |
1.3 |
0.88 |
0.61 |
We don’t know what led to this sudden increase as the company has limited its financial disclosure up to the Q3FY18 in the DRHP. The revenue and profit figures for the entire year have been taken from the company’s investor presentation.
It’s quite evident that the company operates with thin margins. One of the principal reason for this anomaly is that the segment is highly competitive in the unorganized sector.
The industry, in which we are operating, is highly and increasingly competitive due to presence of many small time players in the unorganized sector- DRHP
The company concedes that the competition is, in fact, a concern. The financial implication of being a marginal player in the unorganized sector is that you can’t set your own prices, instead, the market sets the price for you. This is partly the reason why Kshithij Polyline has been working with thin margins. The only real way to make any significant impact on your bottom line is by increasing scale i.e. selling more stationery products. Until the company can establish itself as a brand, our opinion is that the company’s margins will continue to remain in this range.
The company had trade receivables of about 30 % from the past few years which increased to 45 % as on December FY18. One way of looking at this is to say that the company has been selling products on credit to boost its revenues. In any case, its important for investors to keep a tab on this column.
|
Particulars ( in Cr) |
Dec 17 |
FY17 |
FY16 |
FY15 |
FY14 |
FY13 |
|
Trade Receivables |
7.7 |
5.2 |
4.6 |
4.2 |
3.3 |
2.5 |
|
% of Revenue |
45 |
31 |
30 |
35 |
27 |
19 |
The company wants to fulfill three objectives by applying for an IPO
|
Particulars |
Amount Raised through IPO (Cr) |
|
Purchasing Machinery |
4.28 |
|
Working Capital |
3.25 |
|
General Corporate Purpose |
0.76 |
|
Total |
8.3 |
Peer Comparison
Here is a peer comparison of Kshithij Polyline against similar companies within the industry.
|
S.No |
Particulars |
EPS |
P/E |
RONW |
|
1 |
Ecoplast Limited |
6.5 |
20 |
80 |
|
2 |
Duropack Limited |
1.1 |
8 |
15 |
|
3 |
Cosmo Films Limited |
57.38 |
19 |
31 |
|
4 |
Ksithij India Limited |
1.18 |
21 |
13 |
Based on annualized earnings the asking price of Rs 35 translates to a PE of about 21 post issue. Considering the low margins in the business and the presence of large unorganized players in the market, Ksithij Polyline has an uphill task to justify the asking price.
We here at Finception, wish the company all the best in its future endeavor.
Based on annualized earnings the asking price of Rs 35 translates to a PE of about 21 post issue. Considering the low margins in the business and the presence of large unorganized players in the market, Ksithij Polyline has an tough task to justify the asking price.
Review By on September 17, 2018
Finception
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The initial public offer (IPO) of Kshitij Polyline Ltd. offers an early investment opportunity in Kshitij Polyline Ltd.. A stock market investor can buy Kshitij Polyline IPO shares by applying in IPO before Kshitij Polyline Ltd. shares get listed at the stock exchanges. An investor could invest in Kshitij Polyline IPO for short term listing gain or a long term.
Read the Kshitij Polyline IPO recommendations by the leading analyst and leading stock brokers.
Kshitij Polyline IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Kshitij Polyline IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Kshitij Polyline IPO?"
Sorry, we didn't rate the Kshitij Polyline IPO.
Our lead analyst Mr. Dilip Davda didn't rate the Kshitij Polyline IPO.
The Kshitij Polyline IPO allotment status will be available on or around October 3, 2018. The allotted shares will be credited in demat account by October 5, 2018. Visit Kshitij Polyline IPO allotment status to check.
