Huhtamaki PPL Limited (HPPL) is a part of Huhtamaki Oyj, Finland and is known for packaging since the company was founded in 1935. Today, HPPL offers a wide portfolio of packaging solutions that include Flexible Packaging, including a variety of Pouching Solutions, Labelling Technologies, Shrink Sleeve solutions, Specialised Cartons, Cylinder Engraving and Specialised Films for high barrier. And all this supported by Packaging Machine Expertise, to provide you with Total packaging solutions. Today HPPL is like One Stop Shop in a true sense. HPPL has a thriving International business, an area of high focus across its technology groups. With 13 state of the art, fully integrated manufacturing facilities at Thane, Silvassa, Hyderabad, Rudrapur, Navi Mumbai, Parwanoo, Khopoli, Taloja, Ambernath, Banglore; a highly skilled and experienced team, HPPL is capable of working with you from product inception to the super market and with complete control and confidentiality. Through close collaborations with customers in developing innovative packaging solutions, HPPL delivers truly meaningful brand experiences for consumers. HPPL’s technical excellence and superior quality standards help its customers in improving aesthetics, increasing shelf life & handling transportation of their products. HPPL is a pioneer and the market leader in flexible packaging in India and has a market share of 60 % in premium flexible packaging business and about 9 % overall in the organized market, which is of about $2 billion by size. It has currently, installed capacity of for paper & films is about 52,000 MT and company’s capacity utilization rate is 75 % to 80 %. HPPL successfully meets the packaging needs of almost entire range of FMCG segments including personal products, personal wash, laundry, foods, sauces, beverages, bakery products, spices, chocolates and confectionery, dairy and also for seeds, specialized chemicals, electronics, healthcare and many other specific specialized uses including anti-spurious packaging. HPPL thus enjoys Competitive advantage due to use of its superior technology & capability. HPPL has an MNC Tag and with diverse products & Strategic acquisition of competitor, adds to its competitive advantage. India is a growing market for plastics and consumes about 12.8 million metric tonnes (MMT) of plastics annually against global consumption of 285 MMT per year. The plastics and polymer consumption is growing at an average rate of 10 %. About 30,000 processing units with 113,000 processing machines have created manufacturing capacity of 30 MMT per annum in India. This has been achieved with a 13 % CAGR of processing capacity during last 5 years. The industry has invested $5 billion in the machinery and it is expected to invest $ 10 billion more for increasing the capacity during the next 5 years. The per capita consumption of polymers in India during 2014-15 was just 10.5 kg as compared to 109 kg in USA, 45 kg in China and 32 kg in Brazil. India is expected to be among the top ten packaging consumers in the world by 2016. The low level of per capita plastics consumption in India is indicative of the massive growth potential of the plastic industry. Give n the rising consumerism and modern lifestyles, it is expected that per capita consumption will be doubled in the next five years. On financial side the company’s net profit stood at Rs. 16.79 Cr as against Rs. 15.97 Cr in the corresponding quarter ending of previous year, an increase of 5.13 %. Revenue for the quarter rose by 6.76 % to Rs. 557.47 Cr from Rs. 522.19 Cr, when compared with the prior year period. During the quarter, company reported EBIDTA of Rs. 59.94 Cr as against Rs. 55.33 Cr in the corresponding period of the previous year, up by 8.33 %. During Q3 CY16, Profit before tax up by 38.26 % to Rs. 29.09 Cr from Rs. 21.04 Cr in Q3 CY15. EPS of the company stood at Rs. 2.31 a share during the quarter, as against Rs. 2.20 over previous year period. During 9M CY16, Net sales up by 9.66 % to Rs. 1,655.26 Cr from Rs. 1,509.39 Cr in 9M CY15. During the nine months ended 2016, net profit was increased by 23 % to Rs. 69.33 Cr from Rs. 56.37 Cr over the nine months ended 2015. Net Sales PAT of the company are expected to grow at a CAGR of 23 % and 17 % over 2014 to 2017E, respectively. Huhtamaki PPL Ltd is setting up a new Flexible Packaging manufacturing unit in Assam which is likely to be commissioned during the first half of 2017. Huhtamaki PPL Ltd. is one of the most prestigious flexible packaging companies in India and is continuously taking up new initiatives to expand its presence overseas to tap the vast potential in the global markets. With the recent acquisition of Positive Packaging Ltd., the manufacturing capabilities of HPPL are expected to increase considerably which in turn will increase the revenues for the Company. The Company is a market leader in the flexible packaging industry in India and has reputed clients like HLL, Colgate, Nestle, etc. It is expected that the projected growth rate of 15 % in the flexible packaging industry will positively impact HPPL in the future. At the current market price of Rs. 240.30, the stock is trading at a PE of 19.66 x FY16E and 16.50 x FY17E respectively. The company can post Earnings per share (EPS) of Rs. 12.22 in FY16E and Rs. 14.56 in FY17E. It is expected that the company’s surplus scenario is likely to continue for the next three years keeping its growth story in the coming quarters also.
|SALES (₹ Crs)||1,225.34||2,037.38||2,229.45||2,474.69|
|NET PROFIT (₹ Cr)||66.60||76.93||88.85||105.89|
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