SMC Global Securities in its new report has given a buy advice on the shares of Captain Polyplast Limited (CPL). It is advised to buy these shares with a target of Rs 55.
New Delhi: At this time if you are planning to invest money in any stock or if you are looking for any cheap stock to earn from the market, then this news is of great use to you. SMC Global Securities in its new report has given a buy advice on the shares of Captain Polyplast Limited (CPL). It is advised to buy these shares with a target of Rs 55. The closing price of CPL was Rs 40 on the last trading day.
Company presented good results
BSE Listed Captain Polyplast Limited has delivered good results, with the company registering 63 per cent QoQ growth in the fourth quarter. Along with this, 2 percent dividend has also been announced on the face value. CPL has increased its revenue from about Rs 99 crore to Rs 186 crore in FY 2015-FY20, while EBITDA has grown by more than 2 times and PAT by 5.4 times in the same period.
Let us tell you that with the new unit of production operating in Andhra Pradesh, the company has the potential to reach a revenue of Rs 250 crores without setting up additional facilities. The report said that the company is expected to deliver 20 per cent CAGR in PAT with stable margins over the next few years.
Know about the company
CPL is a Micro Irrigation Solution Provider and Manufacturer/Supplier. CPL has a complete range of micro irrigation solutions with manufacturing facilities in Rajkot (Gujarat) and Kurnool (Andhra Pradesh). The company has a marketing and distribution network in 16 states in India, which covers almost 90% of the micro irrigation market in India. It is managed by 18 sales offices, 11 depots and a marketing team consisting of 250 members. CPL works with 750 dealers across northern, western and southern parts. Apart from this, the company exports its products to the export markets of Gulf, Africa and Latin America.
In recent developments, CPL has completed capacity expansion at Kurnool plant with 2 PVC lines and 1 HDPE/Sprinkler line. In addition, CPL Solar is expanding its presence in the EPC segment and has established dedicated teams across the country for retail, commercial and large scale project applications. So far the company has successfully completed solar EPC projects with a capacity of more than 1,500KW among 340+ customers. Currently, they have orders for 5,000KW in the pipeline and additional projects are expected to be finalized and executed in this financial year.
What did the chairman of the company say?
The company’s chairman and managing director Ramesh Khichdia said that the company has grown tremendously due to the increasing demand for micro irrigation products. The government has allocated Rs 10000 crore for micro irrigation in the budget for FY 2022, which is almost double the funds allocated in previous years with an aim to cover 10 million hectares in the next 5 years. He said that we hope that in the coming financial year our core business of micro irrigation will benefit from this development.
During Q4, we have expanded manufacturing capacity in Kurnool owing to strong sales of PVC pipes procured in southern states. The additional capacity will help us expand our retail pipe distribution network in these states. We have also focused our attention on the fastest growing solar EPC segment during the year, which is expected to further support our top-of-the-line growth.
According to the report, the company’s gross margin has increased from 31.6 per cent in FY15 to 39.2 per cent in FY15, while EBITDA margin has increased from 13.3 per cent to 15.2 per cent in the same period. With a very good EBITDA margin, the company has been able to deliver an average ROE of 16.5 per cent and ROCE of 21.8 per cent over the last five years.
