MANJUSHREE TECHNOPACK LTD - Buy !

Business : Ever wondered who is behind designing and packaging jars/containers for Horlick, Bournvita, Boost, Tang, Vicks, Kissan ketchups, Kinley/Limca/Fanta & coca cola beverages etc ???

Today, I bring to you another multibagger in the making- MANJUSHREE TECHNOPACK LTD - a recenlty listed Bangalore based packaging solutions provider with an experience of over two decades in providing its customers with cutting edge plastic packaging solutions. Founded in 1977 by Vimal Kedia as a Umbrella manufacturing company, Manjushree forayed into manufacturing of Plastic Flexible packaging in 1984. The company has answer for every packaging ask - Be it Preforms, Pet Jars and Bottles to Retortable Oxygen barrier Multilayer containers. Today, Manjushree is the largest converter of PET and Preforms in India with an installed capacity of 30,000 MTPA and caters packaging solutions to more than 60% of FMCG clients. We all know that PET containers are not that cheap in market and hence arose a need to develop a container with the attributes of PET, but at a lower cost. MT rose to occasion and came out with a breakthrough innovation - Polypropylene (PP) containers - offers a balance of clarity, impact strength and cost. MT is the pioneer of PP ISBM technology in India.
Financials : For FY2009-10, the company declared a topline of 152.5 crores (35% up from FY09) and net PAT of 10.57 crores (up 41% from FY09) with annualized EPS of 7.80 (whopping 41% up from FY09). The company continues further to declare outstanding results for Q1FY2011 – net Profit of 59 crores (62% growth over Q1 last FY) and an EPS of 3.88. Looking at the organic & horizontal volume expansion with expanding FMCG sector – this company is clearly heading for an annualized EPS of more than 14 in this FY itself. At current price of 68 Rs – this stock is highly undervalued and available at a PE of less than 5. The stock is a MUST BUY and one can expect a huge upside in time to come.
Positives – The company has an outstanding SHP which increased from 54% to 57% now in last 2 years – entrust promoters confidence in the company.
- Manjushree has been growing at CAGR of almost 25% for last 5 years. I can safely visualize this growth rate to continue for next few years based on the aggressive expansions the company has been undertaking.
- MT serves all variety of markets from Spices, Mineral waters to Pharmaceuticals, Liquor etc.
- Manjushree clients include biggies like Cadbury, Heinz, Pfizer, TTK Healthcare, Nestle, ITC, Unilever, PEPSI, Coca Cola, P&G, Bisleri etc to name a few. The list is ever growing ~~~
- MT has opened and is managing the only MUSEUM in India dedicated to packaging - It presents the world of product packaging that spans almost a hundred years. On display are tins, boxes, vanity kits, biscuit boxes, wine bottles, water dispensers and much more. A treat to the eye.
Negatives – None
Conclusion : The stock has corrected a little from its peak of 75 /- this year. Start accumulating MANJUSHREE TECHNOPACK at current price and on dips and I can easily foresee a target of 120-130 in next 8 months estimating an EPS of 14+ this FY. I won’t define a timeline to hold as MT seems to be a giant in the making. This counter looks very strong and the stock is a hold for long term.