Wim Plast Ltd. share price target

Gradual demand recovery post ease in lockdown restrictions While the Q1FY21 performance was largely hit by lockdowns, dealers also shied away from building inventory in the wake of various uncertainties. However, according to market leader in the plastic furniture space, JulyAugust saw ~85% demand recovery post ease in lockdown restrictions. We believe demand was largely driven by tier II, tier III cities where impact of pandemic was limited. We also believe, backed by strong supply chain management, organised players like WPL would have gained market share from regional/unorganised players as latter's business activities were...

Despite rising contribution of VAP categories, the profitability (EBIT margin) of the core business declined ~400 bps in FY17-19. Despite such a decline, we believe WPL's EBIT margin of the plastic furniture business at 21% is the best among other organised players. The profitability of other segments (mainly cooler and mould) remained low mainly due to higher fixed cost. We believe the EBITDA margin of the company would remain in the range of 1920% (vs. ~23% clocked during FY17) as higher profitability from VAP...

Wim plast ltd (WPL) reported subdued numbers for Q2FY19, which were below our expectation. Its revenue declined by 22.1% yoy due to lower sales & volume growth. Gross profit of the company de-grew by 8.8% yoy, due to decline in sales. However, on other hand, the companys EBITDA and PAT margins improved 233bps/15bps yoy, respectively.

Wim Plast Ltd. is the third largest player in moulded plastic segment with market share of around 15%. Recently it expanded into air cooler segment with the aim to diversify its business segment and gain market share. The company has shown decent revenue and PAT growth of 7% & 8% respectively on a CAGR basis over FY14-18.

Cello Brand Supported by Low Raw Material Prices and Strong Financials: Revenue to remain flat supported by volumes during FY17E-19E - We expect WPL's revenue to remain flat with 3.4% CAGR during the period FY17E-19E mainly supported by the volume growth of 2.4% and realisations togrow at 1.0%. We expect the realisations to remain flat on the back of slow recovery in the raw material prices, but volumes to improve on account of increased capacity utilisations in the years to come assuming no new capacity additions.

ICICI Securities Ltd | Retail Equity Research Wim Plast (WPL) recorded sales growth of ~15% YoY to | 99.3 crore in Q1FY17 largely driven by its cooler sales. Performance of plastic segment remained flat as volume growth of 6-7% YoY was offset by a decline in realisation by 8%. Benefit of lower commodity prices helped in expansion of gross margin by 854 bps YoY, which was partly offset by an increase in other expenditure by 396 bps YoY. EBITDA margin increased 430 bps YoY to 22.7%. The higher tax rate (up 330 bps YoY)...