NILKAMAL
In last 2 decades of Indian capital market history the
clear standout winners are Nestle , Itc , United Spirits , Symphony , Relaxo ,
Titan etc. . One common quality in all of these businesses is widely accepted Brands.
Nilkamal is one of the widely accepted brand which is
highly popular but also highly underrated.
Nilkamal Limited is Asia's
largest plastic processor of moulded products based in India .It is also
world's largest manufacturer of moulded furniture. The Furniture product range
comprises Plastic Furniture, Material Handling Crates and Bins, Baby Table,
Center Table, Dining Table, Planter, Rack, Stool, Industrial Pallets, Waste
Bins, Insulated Crates etc.
NILKAMAL'S CORE BUSINESSES
·
Material Handling Solutions
·
Moulded Furniture
·
Nilkamal Mattrezzz
·
Nilkamal Home Ideas, the Home Furnishing Store
·
@home, the Mega Home Store Retail Chain
The
Company has 8 large manufacturing plants in India:
·
North - Samba (Jammu & Kashmir) and Greater Noida (Uttar Pradesh)
·
East - Barjora (West Bengal)
·
West - Sinnar, Nashik (Maharashtra) and Silvassa (Union Territory of
Dadra & Nagar Haveli) (2 plants)
·
South -Pondicherry (Union Territory) and Hosur (Tamilnadu)
The Company has advanced machinery in
Injection Moulding, Rotational Moulding, Vacuum Forming, Polyurethane Injection
(of insulation) and capabilities for Blow Moulding.
Following is last 12 quarter summery of the Company’s performance.
Quarterly Results Consolidated
|
Dec 2012
|
Mar 2013
|
June 2013
|
Sep 2013
|
Dec 2013
|
Mar 2014
|
June 2014
|
Sep 2014
|
Dec 2014
|
Mar 2015
|
June 2015
|
Sep 2015
|
Sales
|
390.66
|
438.38
|
387.69
|
420.52
|
376.70
|
458.09
|
415.21
|
455.66
|
418.98
|
488.14
|
455.08
|
479.05
|
Expenses
|
364.75
|
414.59
|
359.74
|
381.46
|
347.57
|
418.08
|
389.07
|
427.23
|
389.87
|
442.31
|
405.68
|
431.20
|
Operating Profit
|
29.43
|
28.75
|
31.50
|
42.63
|
32.00
|
42.35
|
29.17
|
31.45
|
33.94
|
49.96
|
54.34
|
54.07
|
OPM
|
7.53
|
6.56
|
8.13
|
10.14
|
8.49
|
9.24
|
7.03
|
6.90
|
8.10
|
10.23
|
11.94
|
11.29
|
Other Income
|
1.51
|
1.68
|
1.24
|
1.24
|
0.95
|
0.09
|
0.89
|
0.64
|
2.81
|
2.00
|
2.47
|
3.76
|
Depreciation
|
10.75
|
10.73
|
11.66
|
13.86
|
11.39
|
12.02
|
14.05
|
13.78
|
13.76
|
12.16
|
12.28
|
12.61
|
Interest
|
11.21
|
10.97
|
10.68
|
10.54
|
10.41
|
9.80
|
7.54
|
7.84
|
8.58
|
6.29
|
5.06
|
4.37
|
Profit before tax
|
7.47
|
7.04
|
9.16
|
18.23
|
10.20
|
20.54
|
7.58
|
9.83
|
11.60
|
31.51
|
36.99
|
37.09
|
Tax
|
2.02
|
2.25
|
2.92
|
5.68
|
3.09
|
6.41
|
2.11
|
2.99
|
3.14
|
9.82
|
11.69
|
11.35
|
Net Profit
|
5.45
|
4.79
|
6.24
|
12.55
|
7.11
|
14.13
|
5.47
|
6.84
|
8.46
|
21.69
|
25.30
|
25.74
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In Last 4 quarter, NilKamal has performed very well. Main Reasons of
these outstanding result are :
- Crude oil prices decline
- People shifting from wooden to plastic furniture
- @home Business started generating profit
Future Prospects:
In my view, Very few people are aware of the material handling business
of Nilkamal. They are market leader in material handling space which had a
tremendous future prospect in a growing Country like India. I am also super bullish
on furniture and Mattress division of the company.
Valuation and View:
The company is run by highly efficient promoters with 64 % shareholding.
They are pairing down the debts in every quarter and they also don’t have big
capex planned for the future. From 0.85 debt/equity in 2011 now company only
has 0.33 times debt/equity and most of the debt of the company is mainly
working capital .Long term debt to equity is only 0.01 times which is almost debt
free.
I am not an expert to predict crude oil price in the future but
if we analyze last 10 years financials of the company , Nilkamal also did well
when crude was 100 $ per barrel
At market cap of 1800 crore rs (250 million USD) it is a market leader
in most of the areas of their business. At the market price of 1250 rs per
share at expected Eps of 65 in financial year 2016 and 85 in 2017, it is
trading at 19 P/E and 15 P/E respectively. Nilkamal is undervalued at 1250 being market
leader in many fields.
