Polyplex Corporation Ltd. (Polyplex) share is in Bullish Momentum – Update

Polyplex Share Technical Analysis:

Polyplex share (Polyplex) is in bullish momentum and ready to move upward after completing its correction. The stock has strong support at the 1950 level on the daily and weekly charts. This counter can reach the level of 2300 to 2800 level in a short period, once closes above 2120 with strong volume. If broader market support, this counter may touch the 3000 level. Buy at this level for the long term.

Polyplex’s share has bounced from its 200 DMA. On the daily chart 20-09-2022, the Polyplex share price closed above its previous day’s high. The counter has formed a hammer pattern with strong volume on the weekly chart. Trading volume on the daily chart is at 100 day moving average. In the weekly chart Polyplex share has given a signal of reversal. That shows clear strength on the counter and gives a buy signal for the short to the medium term provided broader market supports.

The stock is trading at 11.33 PE and 1.34 Price to book value. The sector PE in this industry is 10.74 and PB is 2.38. This shows the potential of the stock to match the industry. Polyplex is a consistent quarterly dividend-paying company with a strong dividend yield of ~5%. Polyplex share is crossing 200 DMA with strong volume. Once it closes above 2120 it will reach 2196 level, which can be treated as a resistance for the stock. The stock has potential to reach its all-time high or more again in 12 months. I may advise to buy in dip or at this level for one year to get 25 to 40 percent gain.

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Polyplex Share Fundamental Analysis:

The company is a small-cap company with a market cap of INR 6445 crores and a face value of INR 10. The company is in the polyester (PET) film business. Polyplex Corporation claims to have the seventh-largest capacity of polyester (PET) film globally. The company is present in 75 countries and serves ~1950 customers across the globe.

Polyplex offers a wide range of specialty, innovative and differentiated products across a variety of packaging, electrical & electronic, and other industrial applications. Packaging products applied into a wide range of applications in Food & Beverages, Labels, Beauty, personal care, and home care industry, healthcare & pharma industry. Polyplex is planning to launch a new PET film line and OLC in the USA in 2023.

The promoters’ shareholding in the company remained the same at 50.97% over five years. FII holdings in the company have been going up Q-o-Q, from 7.71% in Jun 2021 to 0.23 % in Mar 2022.

Polyplex Share Financial Analysis:

Return on Capital employed is 27% and return on equity 18% in FY22. This data reflects a strong valuation of this counter. The EPS of the company has jumped from 88.18 in FY20 to 181.19 in FY22. Polyplex corporation’s total revenue has increased by ~46% from INR 4617.91 crores in FY20 to INR 6,752.38 crores in FY22. The net income of the company doubled from INR 282.04 crores in FY20 to INR 568.80 crores in FY22. The normalized EBITDA margin is 21% for FY22.

Management Team:

The company is under the capable leadership of Mr. Sanjiv Saraf, the chairman of the group. Sanjiv Saraf is an alumnus of the Indian Institute of Technology, Kharagpur, one of the best institutes across the globe. He is one of the promoters of the Polyplex corporation. Mr. Pranay Kothari is the CEO of the group.

Related read Ester Industries, SPIC.

Polyplex Share Price Charts

Polyplex Share Price Daily Chart
Polyplex Share Price Daily Chart
Polyplex Share Price Weekly Chart
Polyplex Share Price Weekly Chart