Uflex Ltd : A stock with Big Bargain
CMP : 265-270
BSE CODE : 500148
Market Cap : 1935 Crore
LISTED ON : NSE/BSE
TARGET : 600/625
Time Frame : 18-24 Months
History of the Company :
Uflex Ltd was incorporated in 1985. It has turned into mulit-billion dollar company in over 3 decades since inception. Uflex ltd with it's large manufacturing facilities of Packaging Films and Packaging products provide end to end solutions to clients in over 140 countries across the globe.
It is India's largest flexible packaging company. It's manufacturing facilities enjoy ISO and HACCP accreditations and its products are approved by FDA.
Uflex has a vast production capacity of BOPET, BOPP Films, CPP Films, Printing and Coating inks, adhesives, facilities for Holography, Metallization & PVDC coating, Lamination and Pouch formation etc. Integrated within its core business profile are allied businesses like Engineering, cylinders and chemicals which give Uflex competitive edge over competitors.
Uflex Ltd's client list include names like P&G, Pepsico, Tata Global, L' Oreal, Britannia, Haldiram, Amul, Ferro Rocher, GSK , Nestle, Coca Cola, Wrigley, Johnson and Johnson Etc.
Uflex Ltd has in current year set up first of it's kind Aseptic Packaging Plant for liquid packaging in Sanand,Gujarat with an investment of Approx 550 crores
Main Business Activities :
- Flexible Packaging Material
Financials of the Company :
- Profit After Tax (PAT) for the year ended on 31st March,2018 has been reported at Rs 310 Crore and turnover at Rs 6789 Crore.
- As per the numbers as on 31st March,2018 the company has generated Return on Equity of approx. 8% , Return on Capital Employed of 9% and Return on Assets of 5%
- The company is a regular dividend paying company and has paid dividend for past 15 consecutive years.
- Debt to Equity ratio is below 1 and is reasonable in nature
- The company is carrying out regular expansion year on year basis
Investment Rationale : Why to Invest in this Stock ??
- Shareholding of the promoters in the company is 44%, FPIs 9% and Bodies corporate 12% indicating strong interest of various group of investors and promoters in the business as on 30th September,2018
- Market Cap to Sales Ratio : 0.26 is very attractive
- Book Value of Stock at present is 596 Rs per Share, which is 55% discount to current market price of the stock. Such a huge discount to book value provides a huge margin of safety to investors making investment in the company at current market price
- Technically on chart the stock appears to be in the process of bottom formation
- At current price of 265 Rs per share and EPS of 45 Rs on trailing basis, the stock is presently trading at an attractive P/E ratio of 6
- At a forward reasonable P/E of 12 and EPS of 50.00, we expect the stock price to soar higher atleast to 600 and higher levels in coming time.
Disclaimer Note: The above is not a research report but information as available on public domain and it should not be treated as a research report. Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations.
Disclosure: It is safe to assume that I might have Uflex Ltd in my portfolio and hence my point of view can be biased. Readers should perform own due diligence before investing. We do not assume any responsibility or liability resulting from the use of information , judgments and opinions for Trading or Investment purposes on the Blog.
