RESULT UPDATE ON JINDAL POLY FILMS LTD:

Jindal Poly Films Ltd has lived upto our expectations and has reported much better results even that our estimates.

Although sales have increased by 8% (volume increase must have been higher due to lower price/kg) but profit margins have literally zoomed. PAT has shot up by WHOPPING 118% to 107.28 crores. In fact Q1 PAT IS EQUIVALENT TO 70% PAT OF ENTIRE FY15. 

Q1 Eps is Rs 25.47. It gives annualised Eps of Rs 100.  However, to be on conservative side, JPFL has potential to deliver Standalone Eps of Rs 90 for FY16. Thus a large sized midcap stock and LEADER IN PACKAGING INDUSTRY is trading @ 4xFY16Eeps.

Further, THESE ARE STANDALONE nos.  JPFL derives around 4700 crores (twice as much as from domestic sales) from its European business. Thus, CONSOLIDATED Eps for FY16 should be more than Rs 140.

If Indian equity markets remain stable and do not crash, Jindal Poly Films Ltd has potential to be Rs 700 in 2-3 months. We feel that if industry prospects remain stable, then JPFL will be in 4 DIGITS in 2016

Genuine investors can buy more. Traders may succeed in selling JPFL next week @ Rs 420-460. Advise not to book profit on Friday 14th August as looking at these nos, JPFL should catch attention of big players of financial services and WILL BE RERATED

Recommended Before Results:

INSTANT BUY: Jindal Polyfilms Ltd Rs 345/:

With reference to our blog previous night, here we are unfolding our 1st stock idea which should provide fantastic appreciation in short term  but even at current levels, should provide multibagger

appreciation in 12-18 months.

JPFL is a leading producer of Polyester and BOPP films mainly used for the flexible packaging industry. Its manufacturing facility at Nasik is the world's single largest location factory for producing these plastic films. In Ocotber 2013, JPFL acquired BOPP films division of ExxonMobil and has emerged as the LARGEST producer of BOPP films in the world with a combined capacity of 4,45,000 TPA. Now, JPFL has give manufacturing locations-two in USA and three in Europe

For FY15 JPFL reported Eps of Rs 36,45 on standalone sales of 2504 crores. However, Consolidated sales stood at 7284 crores. PAT was 187 crores. In consolidated nos, JPFL had providede one-off for Rs 117 crores. But for same, Consolidated PAT would have been much higher  (around 260-270 crores)

Now JPFL is being recommended for investment as industry is doing well due to lower crude prices and JPFL is set report BEST EVER quarterly nos today and also FY16 will be best ever in its history.

As per our estimates (info), Standalone results could be as under:

   

Thus, JPFL's Q1 PAT should be HIGHER by around 170% QoQ basis and BEST EVER quarterly performance in co's history. With estimated Eps of 71.50 for FY16, stock is available at PE Ratio of just 4.80.  Being industry leader, stock deserves much much higher valuations.  Moreover, we are unable to estimate Consolidated nos (which co publishes only for full year,not on quarterly basis) but Consolidated PAT could be 400 Crore+  and Consolidated Eps could be Rs 95-100.

Downside from current levels may be very very low. But once Q1 results are announced and if same are as per our estimates, stock could race ahead to Rs 420-450 in few days.  Investors should not be surprised if stock is in 4 digits in 2016.

Full research report (considering proposed merger of Jindal Photo and Europe operations) may be released next week. However, this brief snapshot is being released in view expected bumper results for Q1