Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

Research Analyst Contact Details:
Address: A-412, Shilp Aaron, Sindhu Bhavan Road, Ahmedabad, Gujarat - 380059
Email: services@yellowstoneequity.com
Mobile: +91-7575817289

Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<ul>
<li>RPPL executed well in FY24 with sales volume growth at 18% YoY. However, sudden and significant contraction in raw material prices dampened FY24 sales value growth to just 9% YoY.</li>
<li>Exports sustained its quarterly run-rate of INR 10cr+ in Q4FY24, resulting in FY24 aggregate exports sales at INR 42cr. Exports contributed 15% of revenues in FY24 vs 5% in FY23.</li>
<li>RPPL is also making good progress with its new initiatives. Its Olive Ecopak venture began commercial production in Mar 2024. Its injection molding segment is also scaling up well.</li>
</ul>


RPPL executed well in FY24 with sales volume growth at 18% YoY. However, sudden and significant contraction in raw material prices dampened FY24 sales value growth to just 9% YoY.
Exports sustained its quarterly run-rate of INR 10cr+ in Q4FY24, resulting in FY24 aggregate exports sales at INR 42cr. Exports contributed 15% of revenues in FY24 vs 5% in FY23.
RPPL is also making good progress with its new initiatives. Its Olive Ecopak venture began commercial production in Mar 2024. Its injection molding segment is also scaling up well.


Rajshree Polypack (RPPL): All Set for a Strong FY25

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rajshree-polypack-ltd" target="_blank" data-smartkarma-citation="entities:33486:1" rel="noopener">Rajshree Polypack ("RPPL")</a> reported a robust Q3FY24 led by strong volume growth of 29%+ YoY. EBITDA margin also expanded leading to EBITDA growth of 35%+ YoY.</li>
<li>Export business continues to grow steadily with quarterly run-rate now at INR 10cr. This suggests that on an annualized basis, exports could be INR 40cr vs INR 30cr guided earlier.</li>
<li>Injection molding business is doing well and has reached optimum capacity utilization. RPPL is exploring to expand this capacity and is also expecting it to become profitable from next quarter.</li>
</ul>



Rajshree Polypack ("RPPL") reported a robust Q3FY24 led by strong volume growth of 29%+ YoY. EBITDA margin also expanded leading to EBITDA growth of 35%+ YoY.
Export business continues to grow steadily with quarterly run-rate now at INR 10cr. This suggests that on an annualized basis, exports could be INR 40cr vs INR 30cr guided earlier.
Injection molding business is doing well and has reached optimum capacity utilization. RPPL is exploring to expand this capacity and is also expecting it to become profitable from next quarter.


<ul>
<li>RPPL reported decent Q2FY24 earnings, led by volume growth and margin expansion. Revenue growth was somewhat tepid due to decline in realization led by volatility in raw material prices.</li>
<li>RPPL is seeing good traction in exports with improving mix of value-added products and enhanced geographic reach. Revenue from exports is guided to triple to INR 30cr+.</li>
<li>RPPL has also entered into In-mold Labeling (IML) in rigid plastic injection molding products. This could be a game changer for RPPL in terms of growth and target market potential.</li>
</ul>


RPPL reported decent Q2FY24 earnings, led by volume growth and margin expansion. Revenue growth was somewhat tepid due to decline in realization led by volatility in raw material prices.
RPPL is seeing good traction in exports with improving mix of value-added products and enhanced geographic reach. Revenue from exports is guided to triple to INR 30cr+.
RPPL has also entered into In-mold Labeling (IML) in rigid plastic injection molding products. This could be a game changer for RPPL in terms of growth and target market potential.


RPPL: Climbing Up the Value Chain | All Set for a Strong FY25

<ul>
<li>RPPL reported a weak Q1FY24 due to correction in raw material prices that led to inventory losses and decline in EBITDA margin to 12% vs 14%+ QoQ and 16% YoY.</li>
<li>Given that Q1 tends to be a high demand quarter, RPPL had kept high inventory, which further accentuated the inventory losses.</li>
<li>The raw material prices have stabilized now. EBITDA per kg should stabilize back to around INR 34-35 and should help the EBITDA to grow in line with the volume growth. </li>
</ul>


RPPL reported a weak Q1FY24 due to correction in raw material prices that led to inventory losses and decline in EBITDA margin to 12% vs 14%+ QoQ and 16% YoY.
Given that Q1 tends to be a high demand quarter, RPPL had kept high inventory, which further accentuated the inventory losses.
The raw material prices have stabilized now. EBITDA per kg should stabilize back to around INR 34-35 and should help the EBITDA to grow in line with the volume growth. 


RPPL: Weak Q1FY24 Earnings, However, Long-Term Growth Trajectory Remains Intact

<ul>
<li>Rajshree Polypack's (RPPL's) Q4FY23 came in weaker than expected on both the sales volume and the margins front. Higher depreciation and interest costs led by capex further dampened the profitability.</li>
<li>However, RPPL is executing well on its revenue growth targets led by regular capex led investments. It is on track to do INR 450cr revenues by FY25.</li>
<li>RPPL has potential to post a PAT of INR 30cr+ by FY25, suggesting that RPPL is available at around 6x P/E on a base of FY25E PAT.</li>
</ul>


Rajshree Polypack's (RPPL's) Q4FY23 came in weaker than expected on both the sales volume and the margins front. Higher depreciation and interest costs led by capex further dampened the profitability.
However, RPPL is executing well on its revenue growth targets led by regular capex led investments. It is on track to do INR 450cr revenues by FY25.
RPPL has potential to post a PAT of INR 30cr+ by FY25, suggesting that RPPL is available at around 6x P/E on a base of FY25E PAT.


RPPL: Q4 Weaker than Expected But On Track for Strong Earnings Growth Through FY25

India

Hindusthan National Glass & Industries Limited manufactures glass bottles and vials.

Hindusthan National Glass & Industries (HNGI IN)

Kanpur Plastipack Ltd. manufactures plastic packaging.  The Company produces flexible intermediate bulk containers and plastic bags.

Kaira CAN Co Ltd. manufactures metal containers. The Company manufactures a wide range of OTS and General Purpose Cans for packing Processed Foods, Ready-to-eat Foods, Canned Vegetables, Fruit Pulps, Juices, Pickles, Dairy Products, etc. and Aerosol cans for Deodorants, Room Fresheners, Pesticides, etc.

Hindustan Tin Works Limited produces tin cans for dairy, edible oils, tea, coffee, motor oils, medicines, pesticides, chemical and paint industries.

Flexituff Ventures International Limited manufactures plastic and laminated coated bags. The Company distributes various bags for food and pharmaceutical industries.

Flexituff Ventures International (FLEXI IN)

Orient Press Limited is a commercial printing company. The Company also manufactures packaging products and smart cards.

Rollatainers Limited is a paper manufacturer whose primary products are packaging cartons and polyethylene coated packing material.  The Company also manufactures duplex paper board, writing and printing paper and packaging and weighing machines.  Rollatainers sells its products throughout India and abroad.

Hitech Plast Ltd. manufactures rigid plastic packaging. The Company markets its products to manufacturers and shippers throughout India.

Haldyn Glass Limited manufactures clear glass containers. The Company specializes in Soda Lime Flint & Amber Glass containers.

Radha Madhav Corporation Ltd. manufactures packaging.  The Company produces flexible packaging, specialty films, folded cartons, bags, liners, stretch films, shrink films, overwrap films, thermoformable films, and paper tubes.

Tomypak Holdings Berhad is an investment holding company. Through its subsidiaries, the Company manufactures and trades plastic packaging materials, polyethylene, polypropylene films and sheets, and thermoforming sheets.

PT Berlina Tbk manufactures plastic containers for cosmetic, pharmaceutical, and mineral water industries.  The Company also manufactures toothbrushes, laminated plastic tubes for toothpaste and other types of plastic products.

SCGM Bhd is an investment holding company. The Company, through its subsidiary, manufactures and trades of plastic products, such as thermo-vacuum-formed plastic packaging and extrusion sheets.

Southern Packaging Group Limited manufactures and sells flexible and rigid packaging products for the pharmaceutical, food and beverage, and personal care industries.

SHOEI CORPORATION designs, manufactures, and sells plastic film products. The company also operates distribution service of direct mails from manufacturing to delivering.

Superbag Company, Limited produces square-bottomed paper bags and polyethylene for department stores and supermarkets.  The Company also uses environment concern materials such as straws, hemp, sugar cane, bamboo, and food waste to manufacture paper bags.  Superbag markets its products in Asia through Taiwan and Shanghai offices.

Kum Bi Corporation designs, manufactures, and markets glass bottles.  The Company supplies its products to the food and alcoholic beverage manufacturers. Kum Bi also produces and sells cosmetics.

PT Champion Pacific Indonesia Tbk manufactures packaging paper, folding cartons, composite cans, and flexible packaging products for pharmaceutical and food industries.

Thai O.P.P. Public Company Limited manufactures and distributes biaxially oriented polypropylene (BOPP) films for use in food packaging, tobacco, and adhesive tape industries.

cotta CO.,LTD distributes packing materials of food. The Company sells cake boxes, handbags, wrapping paper, ribbons, freshness preservatives, and confectionery materials. cotta markets its products in Japan.

Rajshree Polypack Limited manufactures packaging products. The Company offers coffee cups, trays, lids, plates, bowls, and other containers, as well as plastics rigid sheet. Rajshree Polypack serves dairy, beverages, retail, pharmaceuticals, and electronics industries in India.

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Rajshree Polypack (RAJPPL IN)

Rajshree Polypack (RPPL): All Set for a Strong FY25

RPPL is poised for high growth over the next three years led by its various new initiatives across value-added products, new product categories and...

Ankit Agrawal, CFA

RPPL: On Track for a Strong FY25

RPPL's new products and focus on exports is setting it up well for robust growth over FY25 and FY26. At the current valuation, an investment in...

Ankit Agrawal, CFA

RPPL: Climbing Up the Value Chain | All Set for a Strong FY25

RPPL reported a decent Q2FY24. Margins are stabilizing as raw material pricing is normalizing. RPPL's long-term growth trajectory is attractive led...

Ankit Agrawal, CFA

RPPL: Weak Q1FY24 Earnings, However, Long-Term Growth Trajectory Remains Intact

RPPL reported a weak Q1FY24 due to decline in raw material prices. However, RPPL is on track to achieve INR 500cr revenue by FY26. At current...

Ankit Agrawal, CFA

RPPL: Q4 Weaker than Expected But On Track for Strong Earnings Growth Through FY25

RPPL is on track to do INR 450cr revenues by FY25 vs INR 250cr+ in FY23. At current valuation, an investment in RPPL has potential to more than...

Ankit Agrawal, CFA

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