Ester Industries.
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=2778
Printed Date: 21/Apr/2025 at 3:08pm
Topic: Ester Industries.
Posted By: rushabh
Subject: Ester Industries.
Date Posted: 10/May/2010 at 4:11pm
| Create a topic on Ester Industries. Want some clear vision on dis one. Thanks basantji , appreciate it |
Replies:
Posted By: hit2710
Date Posted: 10/May/2010 at 12:38pm
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This could be an interesting pick. 9m eps at around 3.5, and promoters have availed pref offer as mentioned below in the bse announcement.
Ester Industries - Outcome of Board Meeting | 24/12/09 16:51 Ester Industries Ltd has informed BSE that the Board of Directors of the Company at its meeting held on December 24, 2009, has allotted 5,217,392 Nos. Equity Shares of face value of Rs. 5/- each, at a premium of Rs. 18/- per share, upon conversion of 5,217,392 Zero Coupon Unsecured Fully and Compulsorily Convertible Debentures to M/s. Wilemina Finance Corporation and Naomi Consolidated Inc, in equal proportion. Further, Board of Directors in the same meeting has also allotted 2,173,914 Nos. Equity Shares of face value of Rs. 5/- each, at a premium of Rs. 18/- per share upon conversion of 2,173,914 Zero Coupon Convertible Share Warrants, to Super Leasing Ltd. The above allotment has been made pursuant to the special resolution passed by the members in the Extra Ordinary General Meeting of the Company held on October 21, 2009. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: PKB2000
Date Posted: 10/May/2010 at 12:50pm
------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: Mohan
Date Posted: 12/May/2010 at 1:25am
Dada, This company has written off accumulated losses against equity capital resulting in the face value getting reduced from Rs 10 to Rs 5 Paid up. Only reason I know is that they sent stickers to be affixed on the paper certificates for the shares I hold in physical form. ( I will have to look for the certificates now so that I can convert it to demat ) Basically, The Company has come back from the dead. Wonder if I should sell it or wait a bit longer. Anyone has any news on it ? ------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: rushabh
Date Posted: 14/May/2010 at 3:55pm
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FY 10 results will be out on 18th May. Lets wait for them and then judge the road ahead. No doubt the investment is be profitable if u go long. Have started taking small positions. Just need somebody to throw a bit of light on it. |
Posted By: hit2710
Date Posted: 14/May/2010 at 6:57pm
I have a report by Anand Rathi dated 28 July 2009 where in their Juganoo - Multibagger idea, Ester had been recommended at 21 with price targets of 30 in six months and 40 in 1 year. There they have discussed details of the company. You can search valuenotes for Ester and find the report. I think promoters also took pref offer at around 21 or so sometime back. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: hit2710
Date Posted: 14/May/2010 at 7:56pm
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Looking at the dec 09 results from bse, the enhanced engineering plastic capacity has been commissioned in sep 09 and the PET capacity expansion was supposed to be commissioned in dec 09. Results for FY 10 will give a better guidance to the future course of the company.
Only problem seems to be the raw material costs which probably is dependent on crude movements. And company does not seem to have too much pricing power. For 9m FY 10 company has clocked eps of around 3.58. And about promoters taking pref allotment, they have taken around 88 lac shares at a price of 23 on conversion of warrants and fcds. Some of the negatives seem to be priced in at cmp of around 19-20 although it might be available cheaper also. So accumulation seems to be the order of the day. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: srisaurabh2000
Date Posted: 20/May/2010 at 1:40pm
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This is owned by the Singhanias of LML group and after division this one came to Sitaram Singhania/Arvind Singhania. The main business activities are production and marketing of polyester films and engineering plastics. They have integrated manufacturing facilities. Ester produces polyester resins which are used for manufacturing polyester films and engineering plastics. Polyster films find use in packaging and engineering plastics find use in optic fibe, injection moldings for electronics & telecom, auto components, home electrical components like Energy Meters, CFLs, Miniature Circuit Boards. Their engineering polymer clients are listed here: http://www.esterindustries.com/approvals.htm - http://www.esterindustries.com/approvals.htm Growth drivers Negatives Numbers
Promoter stake - 68.38 - This has increased from 2003 when it was at ~49.5% levels. P/E 4.77 RONW ROCE FY09 29.4 Net Sales Adjusted Net Profits D/E There net profits have gone down by 16.63% from 2009 - http://www.indiainfoline.com/Markets/News/Ester-Industries-net-profit-declines-16.63-percent-in-the-year-ended-March-2010/3079163164 - http://www.indiainfoline.com/Markets/News/Ester-Industries-net-profit-declines-16.63-percent-in-the-year-ended-March-2010/3079163164 They have declared a dividend of 20% (Rs 1 on Rs 5 share) - http://www.indiainfoline.com/Markets/News/Ester-Industries-recommends-dividend/3080485254 - http://www.indiainfoline.com/Markets/News/Ester-Industries-recommends-dividend/3080485254 . In 2003 they had gone through a restructuring after 4 years of continuous losses.
The benefits can come from the capacity expansion else the stock has not done much for last 6 months or so - from 2009 AR they should now be running at full capacity currently. Though on news of dividend it has gone up while the markets have been going down.
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Posted By: rushabh
Date Posted: 24/May/2010 at 2:52pm
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Hi Saurabh,
would you please throw a light on the management of this company in context of their ability, reliability, efficiency, insight, etc. Further, i would like to know about their growth potentiality and niche areas. Your views on this would be appreciated.
Thank You
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Posted By: srisaurabh2000
Date Posted: 30/May/2010 at 11:05am
Rushabh, While the PE, P/BV etc. looks attractive and the management has been running this business for a while - the challenge is that the business by itself does not have too many differentiation factors and don't see any niche being created. China now is focussing more on their internal needs which is a plus for this business but most countries have put trade barriers plus dollar uncertainity also has not helped in the exports. It is at a discount compared to Polyplex - but Polyplex is much better placed with facilities in Thailand and Turkey. Garware polyster is a bigger player and available at more discount and also has better ROEs. My thought is that currently there are many interesting options in the market today than this one - this one might deserve a look closer to Dec. when their capacity expansion is due or when the market is grossly overpriced. |
Posted By: master
Date Posted: 09/May/2011 at 10:10pm
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They had a good year and they share it with all shareholders, looks simple.
Including interim, total DPS is Rs 4 that makes a dividend yield of about 12% (at my price and around that number for most others too hopefully).
------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: learn2earn
Date Posted: 24/Jul/2011 at 4:28pm
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going through a report,to summarize the positives and negatives:
Positives: demand of PET films growing annually at 15% mainly used for packing in FMCG sector(packaged food) Engg. plastics div. that caters to electrical, automotive sectore to grow 20% low D/E ratio of around 0.35 sound promoter holding of 67% capacity expansion to further increase sales Negatives: single most important factor is dependency on crude prices, so any increase or decrease significantly affects the margins Ban on use of plastics for gutka n pan masala packing have hurt margins ------------- INVESTING - EMOTION = SUCCESS |
Posted By: vinvestor2010
Date Posted: 24/Jul/2011 at 6:47pm
| Sir how does this compare with Manjushree Technopak , any idea?? |
Posted By: shontou
Date Posted: 11/Aug/2011 at 5:12pm
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Conference Call
Ester Industries Margin declined owing to decline in PET film realizations coupled with increase in prices of raw material The company held its conference call for discussing Q1 FY12 results. Key highlights The net sales was up by 53% to Rs 169.41 crore while net profit was down by 81% to Rs 1.27 crore due to fall in OPM from 14.3% to 7.83% on Y-o-Y basis. PET film sales including PET Chips increased significantly on the back of 1.8x increase in sales volume of PET films from 6935 MT to 12651 MT OPM declined owing to decline in PET film realizations coupled with increase in prices of raw material. Raw material prices as a percentage of revenue increased from 58.4% in Q1 FY11 to 67.9% in Q1 FY12 Net Sales from polyester film & chips up 62% to Rs 148.54 crore. It contributes 88% of total revenue compared to 83% in Q1 FY11. There was a strong growth in PET Film sales volume in both domestic as well as export markets. Domestic sales for PET films increased 30% from 4829 MT in Q1 FY11 to 6288 MT in Q1 FY12. Export sales for PET films increased 202% from 2106 MT in Q1 FY11 to 6363 MT in Q1 FY12. The capacity utilization for Polyester film segment stood at about 90%. Net Sales from engineering plastics division up 11% to Rs 20.86 crore. It contributes 12% of total revenue compared to 17% in Q1 FY11. The domestic market contributes 56% of revenue compared to 80% in Q1 FY11 while export market contributes 43.6% of revenue compared to 20% in Q1 FY11. ------------- Every day, self-proclaimed stock market "experts" tell us why the market just went up or down, as if they really knew. So where were they yesterday? |
Posted By: rkgautam
Date Posted: 11/Aug/2011 at 5:33pm
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the stock has been hammered in the past few days. thanks to mild recoveries by the Sensex, the stock is holding up.
However, the question is...can it be a turnaround story? Does the company have in it to atleast double from here if not go up to 100 levels again..? |
Posted By: shontou
Date Posted: 19/Nov/2011 at 6:52am
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Conference Call
Ester Industries Polyester film prices should go up by Rs 12-15 per kg to achieve break-even levels Ester Industries held conference call on November 16th, 2011 to discuss its performance for the quarter ended September 2011. Key highlights Net revenues grew by 10% to Rs 161.66 crore primarily on the back of increase in BOPET sales volumes by 75% on y-o-y basis to 25,000MT in Q2FY12 against 14,300 MT in Q2FY11 in spite of awful market conditions. The operating profit declined by 74% to Rs 14.94 crore as operating profit margin crashed from 38.6% in Q2FY11 to 9.2% during the quarter under review on the back of decrease in sales realization and increase in raw material costs. Increase in interest costs by 202% to Rs 7.20 crore and rise in depreciation costs by 78% to Rs 6.68 crore coupled with the Forex loss of Rs 3.18 crore due to currency fluctuations together lead to a loss of Rs 1.07 crore during the quarter ended September 2011 as against net profit of Rs 36.71 crore in Q2FY11. For the H1FY12, the Company witnessed 29% increase in revenues to Rs 331.47 crore on y-o-y basis majorly on increase in polyester film sales (PET) by 34% to Rs 293.3 crore. During H1FY12, polyester film segment contributed about 89% to the total revenues and the remaining 11% of revenues was from engineering plastics segment. The share of Exports in sales was 44% and domestic sales share was 56%. The Company has made its entry into new specialty PET resin business. It is a knowledge-based business, which is completely dependent on R & D capability. The Company stated that around 30,000 tonnes of capacity is available in the polyester segment and it will be utilized in the PET resin business. The capex planned for the business is Rs 12-13 crore towards some modernization equipments .It is expected that it would start generating revenues from the beginning of FY13 and might attain about Rs 150-200 crore in the same fiscal year. During the quarter, the other expenditure increased by 923 bps to 22% on higher selling and packing expenses etc on surge in the polyester films production on y-o-y basis. During the quarter, the average price of the polyester films declined by sharp 32% to Rs 108 / Kg and the current price is at Rs 92-95/Kg. During the quarter, the capacity utilization of polyester films is 90% (optimum) and the capacity utilized for the polyester chips and the engineering plastics stood at 50% and 40% respectively. As on September 30, 2011, the Forex loans stood close to Rs 130 crore (11 million in Euro terms and 6 million in USD terms). The Rupee term loans stood at Rs 22-25 crore and the working capital is at Rs 72-80 crore. The Company is incurring losses at the current price of Rs 92-95 per kg of polyester films. The break-even levels will be achieved only when the product prices by Rs 12-15/Kg, without corresponding increase in input costs. The Company expects higher margin and profits in FY13 on the back of new specialty PET resin business. ------------- Every day, self-proclaimed stock market "experts" tell us why the market just went up or down, as if they really knew. So where were they yesterday? |