All You Need To Know About Sintex Plastic Technology Ahead Of Its Listing

Shares of Sintex Plastic Technology, known for its eponymous water storage tanks, will list on Tuesday. It was demerged from Sintex Industries Ltd. in May, now the textile unit of the group.

Here’s all you need to know about the company…

• Sintex Plastic makes prefabricated structures, custom moulding and storage tanks.
• It will mirror the shareholding pattern of Sintex Industries, 30.63 percent owned by promoters as of June 30, according to data available on the BSE.
• Sintex Plastic contributed 88 percent of revenues and 84 percent of earnings before interest, tax, depreciation and amortisation before the demerger.
• The company will have two wholly owned subsidiaries –Sintex BAPL Ltd. and Sintex Infra Projects Ltd.
• Sintex BAPL will house domestic and overseas custom moulding and the storage water tanks and allied plastic products businesses.
• Sintex Infra Projects would hold the prefabricated structures, monolithic construction, and other infrastructure businesses.
• Consolidated debt would be equally split between the two entities, according to the management comments, Antique Stock Broking said in a note to clients.
• $110-million foreign currency convertible bonds would come on the books of Sintex Plastics Technology.

Brokerage View

Philip Capital: The stock will list at Rs 120 apiece, brokerage Philip Capital said in a note to its clients. It expects the earnings per share of Rs 8.3 for the year ending March 2018 compared to Rs 7.7 in the previous year. The stock is expected to trade at 12-15 times its earnings after the demerger, given its strong cash generation and return on capital employed of 12-15 percent, Philip Capital said.

Antique Stock Broking: The plastics division will get more valuation post demerger as earlier that vertical was funding the capital-heavy textiles business, said brokerage Antique Stock Broking.

The brokerage values the plastic division at 7.6 times its enterprise valuation to EBITDA ratio for 2018-19. The fair market capitalisation as calculated by Antique for Sintex Plastic for the period is close to Rs 9,100 crore, it said.

Revenue and EBITDA are estimated to grow at a compounded annual growth of 9.2 percent and 10.5 percent, respectively, over the three years to March 2019 with a stable margin of about 17.2 percent, Aasim Bharde, analyst at Antique Stock Broking, said in the note.