SAH POLYMERS IPO

Sah Polymers Company Profile – Key products, finance, management team, strategic insights

Sah Polymers Company Operation:

Sah Polymers company was founded under the name of “Peacock Continental Limited” in Udaipur Rajasthan on April 20, 1992. The Company changed its name to “Sah Polymers Limited” in the year 1998. The company has over 25 years of experience in this industry. Sah Polymers offers customized bulk packaging solutions to business-to-business manufacturers. The company is also working as a third-party manufacturer to manufacture tape and fabric based on customers’ requirements. The company is ISO certified with ISO-9001:2015 and the government recognized it as a star export house.

Sah Polymers operated in two business segments divided by geography. The company sells its products domestically and also exports globally. The company presence in 6 states and 1 union territory in India and supplies products in 6 regions across the globe such as Africa, the Middle East, Europe, the USA, Australia, and Caribbean countries. Sah Polymer currently has a manufacturing facility at Udaipur, Rajasthan with an installed production capacity of 3960 million tons per annum located. The company has two subsidiaries, such as Fibcorp Polyweave Private Limited and Sat E-Com limited. Sat E-com Limited was amalgamated with Sah Polymers with effect from 1st April 2019.

Sah Polymers Key Products & Services:

Sah Polymers is primarily engaged in manufacturing and selling Polypropylene (PP)/High-Density Polyethylene (HDPE) FIBC Bags, BOPP Laminated Bags, Woven Sacks, HDPE/PP woven fabrics, and woven polymer-based products. The products cater to various industries across the globe.

Sah Polymers products are catering to various industries such as Agro Pesticides Industry, Basic Drug Industry, Cement Industry, Chemical Industry, Fertilizer Industry, Food Products Industry, Textile Industry Ceramic Industry, and Steel Industry. The company is also operating the DOPW (Dealer Operated Polymer Warehouse) of IOCL in Udaipur and Jaipur.

Sah Polymers Management team:

Mr. Hakim Sadiq Ali Tidiwala is the vice chairman and whole Time Director of the Company. He has been associated with the company since August 1, 1998. He does not have a formal education degree. Mr. Tidiwala possesses more than 23 years of experience in the polymer packaging Industry. He is responsible for the general management and administration of the company and brings about innovation through the creation of new capacities, and the development of products.

Mr. Asad Daud is the Managing director of the company. He has been associated with the company since April 3, 2009. He holds a master’s of science degree in the field of Accounting & Finance from The London School of Economics and Political Science. Mr. Asad has over 12 years of experience in the polymer packaging Industry. Mr. Asad Daud looks after the management and operations of the company.

Sah Polymers Financial snapshot:

Sah Polymer’s total revenue increased by 11% from INR 4991 lakhs in FY 2020 to INR 5534 lakhs in FY 2021 on a standalone basis. However, total expenses have also increased by 9% from INR 4939.5 lakhs in FY 2020 to INR 5372.2 lakhs in FY 2021. Above all, the company has been making profits during the mentioned period. Sah Polymers recorded a profit of over 300% from INR 30 lakhs to INR 127 lakhs during the same period, which is a significant jump over the year. It is yet to be seen if the company will be able to maintain the same profit level in the future. Cost of materials is the major expense of the company, remained constant year over year which is INR 3,153.63 lakhs in FY 2020 and INR 3,120.50 lakhs in FY2021.

Parameters (INR Lakhs -Year ended March 31)201920202021
Total Income4561.174990.965534.42
Total Expenses4486.254939.515372.21
Profit after tax37.1329.68127.23
Source: DRHP Documents filed with SEBI

Polymer and Packaging Industry Outlook:

The growth of consumption of the polymer in India is recorded at 10.4% during the year 2017-2022. Various by-products of polymers such as Polystyrene and PVC are growing by over 15% annually. The Polymers are using in Low-density polyethylene (LDPE) and linear low-density polyethylene (LLDPE) in India. This segment of polymers is growing at a CAGR of 4.80%. The packaging industry is using more than 50% of LDPE/ LLDPE. The second most used polymer in India is HDPE which is growing at 15% per annum. HDPE is used in the manufacturing of raffia, blow molding, injection molding, and in the paper industry.

The Packaging industry in India is expected to reach USD 204.81 billion by 2025 from USD 50.5 billion in 2019. This industry will grow at a CARG of 26.7% from 2020 to 2025. Packaging is among the high-growth industries in India. India is appearing to be a hub for the packaging industry. Many companies like Polyplex, UFlex, and Moldtek Packaging are a few listed companies that have created a brand name in the international market. With a growing economy, urbanization and participation of a higher population in the job market increases the demand for food packaging, personal care packaging, etc. That will further drive the packaging industry in India.

Currently, the packaging industry is the 5th largest sector of India’s economy and has strong potential to grow faster. The global packaging industry is also expanding primarily due to the factors like growing pharmaceutical, food processing, manufacturing industry, FMCG, and healthcare sector in emerging economies like China, India, Brazil, Russia, and a few other East European countries. This will further drive the packaging industry in India and will have enough space for companies to grow.

Company Growth Strategy:

Sah Polymers is planning to raise funds for its growth through initial public offerings (IPO). The company has planned to expand its manufacturing units to cater to the growing demand of the packaging industry. Other packaging companies like Polyplex and Uflex are doing well in terms of financial performance. Hence, Sah polymers will do well in the future. The details of the IPO are here.

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