XPRO India Ltd. is a part of S.K. Birla Group and is a diversified company involved in the manufacture of BOPP Films, Coextruded Plastic Sheets, Coextruded Cast Plastic Film, Thermoformed Components, Refrigerator Liners, Thermoset Moulding Powders and Synthetic Resins. The company has its manufacturing operations located at Faridabad, Greater Noida, Ranjangaon (Pune) and Barjora (West Bengal). The company had relocated its manufacturing plant located at Kandivali, Mumbai to Ranjangaon, Pune. XPRO India Ltd.
CMP – Rs 15.00
XPRO India Ltd. is a part of S.K. Birla Group and is a diversified company involved in the manufacture of BOPP Films, Coextruded Plastic Sheets, Coextruded Cast Plastic Film, Thermoformed Components, Refrigerator Liners, Thermoset Moulding Powders and Synthetic Resins. The company has its manufacturing operations located at Faridabad, Greater Noida, Ranjangaon (Pune) and Barjora (West Bengal). The company had relocated its manufacturing plant located at Kandivali, Mumbai to Ranjangaon, Pune.
Product Profile/ Manufacturing Operations:
The product range of the company can broadly be categorized into the following :-
BOPP Films – The company manufactures BOPP Films in various thicknesses ranging from 8 microns to 50 microns and in various widths. Application Areas for the product includes Adhesive Tapes, Capacitors, FMCG products, Cigarettes, Print Lamination, and Food Products.
Co-Extruded Cast Film - The company manufactures Co-extruded Cast Film in various thicknesses ranging from 15 microns to 50 microns. These include Stretch Wrap Film, Soft Blister Film, Release Film, Cast Polypropylene Film, and Hygiene Films. Application Areas include Food Products, Tyres, Conveyer Belting, Medical Disposable Packaging, Diapers, Sanitary Napkins and Surgical Drapes.
Co-Extruded Sheets – The company manufactures a wide range of mono-layer and coextruded plastic sheets, based on various thermoplastic resins (such as PS, PP, ABS, PE, etc.), specially designed to meet specific customer needs. Application Areas include Refrigerator doors liners, Luggage, Automotive, disposable cups, Stationery Items etc.
Thermoset Moulding Material - Thermoset molding materials and synthetic resins manufactured by the company are widely used in Electrical Accessories and Components, Automotive Parts, Textile Machinery, Railway Signaling Parts, Grinding Wheels, Friction Materials, Laminates, Melamine Crockery, Adhesives, Inks and Tyre Industries.
Manufacturing Operations:
The company has its manufacturing plants located at Faridabad, Greater Noida, Ranjangaon, Pune and Barjora (West Bengal).
Barjora Unit – manufactures BOPP Film, Metallised Film and Capacitor Film. Faridabad Unit – manufactures Coextruded Plastic Film and Coextruded Plastic Sheet.
Greater Noida Unit - manufactures Thermoformed Components, Refrigerator Liners and Coextruded Plastic Sheets.
Ranjangaon Unit – manufactures Coextruded Plastic Sheets, Synthetic Resin and Thermoset Moulding Powders.
Conclusion:
XPRO India has manufacturing operations located at 4 places and has customers spread across various Industry segments including Food Products, FMCG, Pharmaceuticals, Consumer Durables, Tyres, Laminates, and Grinding Wheels to name a few – the company is therefore insulated against the vagaries in any one segment. The key concern however is the raw material cost and the company’s ability to pass on the increased costs.
The company owns land at Kandivali and has entered into an agreement with a builder for the development of that land. Though the company has not spelt out the details of the land bank or the terms of the agreement with the builder in either its Annual Report or the company’s website, we believe any positive surprises there could significantly rerate the stock.
The promoter group has recently been allotted Equity Shares and Convertible Warrants at Rs 41.50, signifying confidence of the promoters in the future of the company.
The company is currently undertaking a substantial expansion of Biaxially Oriented Polypropylene Films (BOPP) capacity by 50,000 MT per annum. The company has been a consistent dividend payer. Against a market cap of roughly Rs 50 crores and Term Loans of Rs 22.45 crores, the company has a Gross Block of over Rs 125 crores. The company provides for high depreciation every year. The Cash Profit for FY 06-07 was Rs 12.41 crores leading to a Cash EPS of Rs 11.80. The stock therefore trades at roughly 4 times its Cash EPS of FY 06-07. Moreover with a Book Value of over Rs 100, manufacturing operations at 4 places and consistent dividend track record, the stock looks undervalued at its current price.
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