Pasupati Acrylon Ltd(500456): Huge Turnaround: *TP Rs 32 in 2 weeks, Rs 60-70 in 1 year*
PAL is the largest producer of acrylic fibre in India with production capacity of 40,000 TPA. Until 2 years back, co was suffering from high raw material prices ACN which is 100% imported in India. However, new plants of ACN came up ( earlier only in Europe) and Price of ACN dropped to 900 dollars/tonne as against earlier price of 1400 dollars. It has led to change in fortunes of PAL.
a) FY15: Sales 543crores. EBIDTA Rs 40.18cr. PBT 25.24crores. Co provided one-off Rs 3.47crores ( CDR recompense) . After deferred tax of 7.20crores, NP was 14.57crorrs.However, *real NP Rs 25.24 CR as deferred tax only accounting entry and before one-off*
b) In current year, for 9 months, *EBIDTA is 38.31 crores*.After one-off Rs 3.07 crores and deferred tax, NP Rs 16.48 crores. But again *real NP is 28.59cr as deferred tax is accounting entry and without one-off*
c) GAME CHANGER: Due to steeply lower ACN, PAL is on threshold of take-off. For *Q4 alone, PAL should report EBIDTA of 23crores. Without/before deferred tax, Q4NP Rs 20 crores*and
NP ( without one-off/deferred tax) for FY16 Rs 48-49 crores.
*EBIDTA margin*
*FY15 :7.40%*
*FY16: 9.50% for 9 months*
*Q4FY16E: 18.4%*
PAL has extremely bright future considering:
1) No expansion/new addition of capacity in acrylic fibre industry in last 15 years. As a result, due to demand-supply equilibrium, not only plant is operating at 100% capacity, but strong pricing power has emerged.
2) Raw material prices will remain benign due to huge new capacities.
3) No new capacities of acrylic fibre for next 2 years at least which means strong margin growth for PAL.
In FY16, PAL has 43000 tonnes and has emerged as most cost efficient acrylic fibre producer in India ( very low power cost and lower other overheads).
Further PAL *will become debt free soon as co likely to repay 10 crore debt in next 2 quarters*
*Q1 and FY17E: For Q1 of FY17, NP can be 22-23 crores. For FY17, PBT can be 85crores and PAT Rs 72-75 crores*
Considering largest producer of A Fibre, most cost efficient, *very high Ebidta margin* and FY17Eeps of 8+, PAL stock will be treated. *This writer will not be surprised if stock becomes Rs 150 in 2-3 years*
On 20th,PAL will announce Q4 results. Q4 NP can be 20 crores (Loss of 2.80cr in quarter ended March15).
PAL is the largest producer of acrylic fibre in India with production capacity of 40,000 TPA. Until 2 years back, co was suffering from high raw material prices ACN which is 100% imported in India. However, new plants of ACN came up ( earlier only in Europe) and Price of ACN dropped to 900 dollars/tonne as against earlier price of 1400 dollars. It has led to change in fortunes of PAL.
a) FY15: Sales 543crores. EBIDTA Rs 40.18cr. PBT 25.24crores. Co provided one-off Rs 3.47crores ( CDR recompense) . After deferred tax of 7.20crores, NP was 14.57crorrs.However, *real NP Rs 25.24 CR as deferred tax only accounting entry and before one-off*
b) In current year, for 9 months, *EBIDTA is 38.31 crores*.After one-off Rs 3.07 crores and deferred tax, NP Rs 16.48 crores. But again *real NP is 28.59cr as deferred tax is accounting entry and without one-off*
c) GAME CHANGER: Due to steeply lower ACN, PAL is on threshold of take-off. For *Q4 alone, PAL should report EBIDTA of 23crores. Without/before deferred tax, Q4NP Rs 20 crores*and
NP ( without one-off/deferred tax) for FY16 Rs 48-49 crores.
*EBIDTA margin*
*FY15 :7.40%*
*FY16: 9.50% for 9 months*
*Q4FY16E: 18.4%*
PAL has extremely bright future considering:
1) No expansion/new addition of capacity in acrylic fibre industry in last 15 years. As a result, due to demand-supply equilibrium, not only plant is operating at 100% capacity, but strong pricing power has emerged.
2) Raw material prices will remain benign due to huge new capacities.
3) No new capacities of acrylic fibre for next 2 years at least which means strong margin growth for PAL.
In FY16, PAL has 43000 tonnes and has emerged as most cost efficient acrylic fibre producer in India ( very low power cost and lower other overheads).
Further PAL *will become debt free soon as co likely to repay 10 crore debt in next 2 quarters*
*Q1 and FY17E: For Q1 of FY17, NP can be 22-23 crores. For FY17, PBT can be 85crores and PAT Rs 72-75 crores*
Considering largest producer of A Fibre, most cost efficient, *very high Ebidta margin* and FY17Eeps of 8+, PAL stock will be treated. *This writer will not be surprised if stock becomes Rs 150 in 2-3 years*
On 20th,PAL will announce Q4 results. Q4 NP can be 20 crores (Loss of 2.80cr in quarter ended March15).
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