Resins and Plastics Unlisted Shares
BUY
₹430.00
SELL
₹469.00
About Resins and Plastics Unlisted Shares
Resins and Plastics Ltd. (RPL), established in 1971, is a prominent synthetic resin manufacturer in India. The company specializes in producing a wide range of synthetic resins, including Alkyd Resins, Epoxy Resins, Phenolic Resins, and Ketonic Resins. These products cater to various industries, such as adhesives, coatings, printing inks, insulating varnishes, lamination, textiles, foundries, and cosmetics. With its strategically located manufacturing units in MIDC, Taloja (Maharashtra) and GIDC, Ankleshwar (Gujarat), RPL is well-positioned for both domestic and international distribution.
The company is also known for its eco-friendly approach through its associate company, Pragati Chemicals Ltd. (PCL), which manufactures amino resins, epoxy resins, and ketonic resins. With an eye on expanding its export market, RPL serves countries across Asia, Africa, the Middle East, and Southeast Asia.
Business Divisions
Resins and Plastics Ltd. operates several key business divisions that contribute to its broad portfolio of products:
- Synthetic Resins Manufacturing: RPL is a leading producer of various synthetic resins, including Alkyd, Epoxy, Foundry, Ketonic, and Phenolic Resins. These resins serve industries such as adhesives, coatings, printing inks, and textiles.
- Export Operations: The company is a notable exporter of synthetic resins, catering to coatings and printing ink manufacturers in neighboring countries, with plans for further expansion into international markets, particularly in Asia, Africa, and Southeast Asia.
- Technology: RPL invests in technology, utilizing an in-house IT system for demand generation, sales forecasting, and CRM software, ensuring superior customer service and maintaining long-term business relationships.
Financial Performance Highlights of Resins and Plastics Unlisted Shares
RPL has shown a mix of growth and challenges in recent financial years. Below are the key financial highlights reflecting the company’s performance and its future potential for Resins and Plastics Unlisted Shares:
- Revenue Performance: RPL’s revenue for FY24 was ₹258 Crores, which represents moderate growth compared to ₹252 Crores in FY23. However, this was a decrease from ₹314 Crores in FY22, highlighting a slight dip in performance. The company needs to focus on boosting its revenue growth and maintaining consistent demand in its core markets.
- Declining Gross Margins: The company’s gross margins have significantly dropped from 47.45% in FY22 to just 19.77% in FY24. This sharp decline in margins is mainly due to higher raw material costs, which have impacted the profitability of RPL’s products. Gross margins have also suffered from increased operating costs associated with manufacturing.
- Stable Profit Margins: Despite the decline in gross margins, RPL managed to report a Profit After Tax (PAT) of ₹12 Crores in FY24, up from ₹10 Crores in FY23. The company continues to show a stable Net Profit Margin (NPM) of 4.65% in FY24, reflecting its ability to maintain profitability even under pressure.
- Debt-Free Position: RPL remains debt-free, a significant advantage in maintaining financial stability. This is an essential factor for investors looking at Resins and Plastics Unlisted Shares, as a zero-debt position allows for more flexibility in business operations and expansion without the burden of interest payments.
- Cash Flow Challenges: One of the concerns for RPL is the negative free cash flow reported due to increased capital expenditures. In FY22, free cash flow was negative due to a capital expenditure of ₹2.67 Crores, and the company experienced a decline in cash reserves, which fell from ₹14 Crores in FY20-21 to only ₹0.67 Crores in FY21-22. This indicates that while the company remains profitable, it is facing liquidity challenges that could impact its operational flexibility.
Pros
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Debt-Free & Stability: RPL’s zero-debt status and strong financial structure ensure growth flexibility, making its unlisted shares attractive to investors seeking stability and long-term security.
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Technological Advancements: RPL leverages technology for demand forecasting, CRM, and operational efficiency, strengthening its market position and ensuring sustained customer loyalty in a competitive industry.
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Growing Export Market: Expansion into Asia, Africa, and the Middle East unlocks growth potential, capitalizing on increasing global demand for synthetic resins and boosting RPL’s international presence
Cons
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Margin Pressure: Rising raw material costs, especially in resins and plastics, have led to declining gross and operating margins, threatening RPL’s long-term profitability and increasing financial strain.
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Trade Receivables: RPL’s trade receivables grew from ₹30 Cr (FY20) to ₹41 Cr (FY21), causing negative cash flow, increasing liquidity risks, and making it difficult to manage operational expenses efficiently.
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Cash Flow & Liquidity: Declining cash reserves and negative free cash flow restrict RPL’s ability to reinvest, manage short-term financial obligations, and operate without external funding, impacting overall business stability.
