NAME- VAIDEHI SHETE

CLASS- FY MMS B
ROLL. NO- 99
SUBJECT- ANALYSIS OF FINANCIAL
STATEMENTS
PROJECT REPORT ON- PRIMA PLASTICS
PROJECT GUIDED BY: PROF.MEGHA HEMDEV
ACADEMIC YEAR 2015-2017
INDEX
Introduction

Balance Sheet Statements

Profit and Loss Statements
Comparative Statements
Commonsize Statements
Trend Analysis Statements
Peers Comparisons
Cashflow Statements
Ratios
Interpretations

PRIMA PLASTICS
About Us
We design and manufacture plastic moulded furniture from chairs, baby
chairs, dinning tables, stools and teapoys in a wide range of attractive
colors.
Prima Leisure has consistently increased its market share and has
consolidated its position as a brand leader in the garden & leisure
furniture industry through careful product development and planned

marketing. Our state of the art manufacturing process with virgin

compounds made to our specifications ensures production of high quality
and totally weather proof furniture.

ProfilePrima Plastics Limited is one of the major market leaders in the Plastic
Moulded Furniture industry in India since the year 1995. We have been
conferred the Top Export Award since the year 1996 from PLEXCONCIL
India in the in the "Moulded Furniture Category" with an annual turnover
of more than USD $15 million dollars.
Prima Plastics design and manufacture plastic moulded furniture from
chairs, baby chairs, dinning tables, stools and teapoys in a wide range of
attractive colours. Prima Plastics also export its products to USA, Africa
and the Middle East.
Prima Leisure has consistently increased its market share over the last few
years and has consolidated its position as a brand leader in the garden &
leisure furniture industry through careful product development and
planned marketing. Its state of the art manufacturing process with virgin
compounds made to our specifications ensures production of high quality
and totally weather proof furniture.
Products are designed for maximum seating comfort and relaxation, light
weight, zero maintenance cost, easy stack-ability, weather resistant and
easy to clean.
Prima Plastics clients range from various industries from hotels,
restaurants to household use for swimming pools, gardens, etc. from
domestic and international markets.
They have received the following Top Exporter Awards by PLEXCONCIL
India in the Moulded Furniture Category

1996-97 - First Position

1997-98 - First Position

1998-99 - First Position

1999-2000 - First Position

2000-2001 - Second Position

2001-2002 - First Position

2002-2003 - First Position

2003-2004 - Second Position

2004-2005 - First Position

2005-2006 - Second Position

2006-2007 - First Position

2008-2009 - First Position

The company operates mainly in two business segments i.e. plastic

furniture (contributed ~94% to FY14 topline) and aluminium composite
panel (contributed ~6% to the FY14 topline). PPL with 6% market share
(value wise) is the third largest plastic player in India after Nilkamal and
Wim Plast. The company has 200 distributors and a dealer network of over
2000 across India. Export revenues grew at 24% CAGR in FY10-14. PPL
exports its products mainly to South Africa, Middle East and Latin
American countries. To tap African markets, the company formed a 50% JV
in 2006 called Prima Deelite Plastics Pvt Ltd in Cameroon. Consolidated
revenues recorded 16% CAGR in FY10-14 while the EBITDA margin
remained volatile in the range of ~7-13% during the same period. In the
last three years, PPL managed to reduce its debt level (largely working
capital) by ~28% (from FY12) while financing its long term expansion plan
through internal accruals. Focus to improve plastic business by hiving off
loss making division. PPL is largely into two business lines i.e. plastic
furniture and aluminium composite panel (ACP) wherein the performance
of the plastic division remained satisfactory with topline growth of ~16%
and EBIT margin in the range of ~6-12% in FY10-14. The ACP division
being an industrial category faced severe challenges due to a slowdown in
demand for aluminium panels and higher input cost, which caused the
company to incur continuous losses in FY10-14. However, to improve the
focus only on the plastic division, the company has decided to hive off it
loss making ACP division. This will also help PPL to improve its
consolidated EBITDA margin, going forward. Volatile EBITDA margin in
plastic division due to lower pricing power The financial performance in
the last five years remained volatile in terms of margins due to1) Lower pricing power in plastic products,
2) losses from ACP divisions &
3) expansion in new geographies (largely in eastern markets).
This finally resulted in higher working capital requirements and lower
returns ratios (RoE: 11%, RoCE: 14% in FY13). However, the financial
performance improved in FY14 with the improvement in EBITDA margin
(~13%) and return ratios (RoE: 15%, RoCE: 19%). The management
guided at an improvement in EBITDA margin, going forward, due to benign
raw material prices (crude derivatives) & volume growth in plastic
division. PPL is currently trading at 7x FY14 EPS.

Management meet highlights:

PPL is the third largest player in the plastic furniture segment after
Nilkamal and Wim Plast with a value market share of ~6%. The company

has a presence across India with manufacturing plants in Daman and

Kerala. PPL sells its products in the northern and eastern markets through
the outsourcing model. Further, the company has finally decided to hive
off its loss making ACP division, which would benefit the company in the
long run as the management can focus on the core business i.e. plastic
division. The company started a JV in South Africa (Prima Deelite Plastics)
at an investment of | 1 crore in 2006. PPL is doing exceptionally well and
clocked revenue CAGR of 38% in FY10-14 with an EBITDA margin of
~33%. However, even though the EBITDA margin is expected to come
down, going forward, we expect it to stabilise with an increase in revenue
expenditure and rising competition In the domestic market, the
company plans to enter Andhra Pradesh by establishing a manufacturing
plant near Vishakhapatnam. This will help the company to increase its
market share in the eastern region. After a successful venture in South
Africa, PPL is exploring opportunities to start a new venture in Latin
American countries to set up a plastic furniture plant. The management
has guided that the aforesaid expansion would be though internal accruals
On a standalone basis, PPL plans to maintain its historical growth rate of
five years (i.e. ~12%) while focusing on improving EBITDA margin by
hiving off its loss making division from FY16 onwards. Since the company
has no plan to raise further debt, we believe the interest cost would be to
the extent of working capital requirement. The management is also
confident of maintaining its current payout ratio of ~15% Exhibit 2:
Revenue and margin trend of plastic segment 53.7 60.6 64.9 83.1 96.6 0.0
20.0 40.0 60.0 80.0 100.0 120.0 FY10 FY11 FY12 FY13 FY14 (| crore) 0 2 4
6 8 10 12 14 (%) Plastic moulded furniture EBIT Margin(%)

Whether to hold this companies stocks

or not
BSE
Mar 14, 16:00

117.50
0.10 (+0.09%)
VOLUME 15,606

PREV. CLOSE
117.40

OPEN PRICE
118.00

BID PRICE (QTY.)

117.20 (112)

OFFER PRICE (QTY.)

117.90 (75)

Current market price and then categorises them as Strong Buy, Buy, Hold
and Sell. The performance horizon is two years unless specified and the
notional target price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high
conviction; Buy: >10%/15% for large caps/midcaps, respectively; Hold: Up
to +/-10%; Sell: -10% or more

CommentsReposted about 2 days 11 hrs 53 min 30 sec ago by market tech

company has reduced the debt and now almost debtfree , company has been
maintaining a healthy dividend payout of 19.87% - my target for prima plastics is
rs 200 for the long term with a stoploss of rs 104
1.31 PM Mar 11th
2. Price when posted : BSE: Rs117.00 ( 2.90 % )
1.

one should buy this stock at around 110 levels....it has moved slowly and
steadily from 35 to 120 in a year and has more potential once the bull market
starts. business is quite good
10.05 AM Mar 9th |
3. I feel there is a lot of pent up momentum in the stock particularly bcoz of the
fantastic results when the price was around 120..it has somehow managed to not
go below 105 bcoz of the good results..I somehow feel the markets have turned
bullish albeit for the short term..might take out 7300-7400..if the nifty goes up by
another 150 points this can reach 130...the stock can tank max 20 percent from
here if the nifty goes to 6500 levels but then again it would be a fantastic price
to buy..another gr8 thing is the institutional holding is very low which will ensure
less radical selling..
11.05 PM Feb 17th

Liquidity
Ratio's
1. Current Ratio = Current assets /
current liabilities

Standard current ratio prescribed by the industry is

2:1
However, the co has good current ratio to meet its all currennt obligations for
payments.
From comparison, it is clear CL exceeds CA and CR is steady which show the Co's failure in me
short term liabilities.
2.Quick Ratio's = Current assets - prepaid expenses- stock in trade / Current
liabilities- bank O/D
Yea
r

Quick assets

201
2
201
3
201
4
201
5

Quick
Liabilities

Ratio

#DIV/
0!
#DIV/
0!
#DIV/
0!

Generally standard ratio of 1:1 is good for cash

operations.
The Co's has poor ratio to meet its cash
operations.
Due to the nature of its business, these ratio are not enough to meet its cash
operations.

Solvency
Ratio's

3. Debt Equity Ratio = Total Debt / Total

shareholder's equity

Yea
r
201
2
201
3
201
4
201
5

Total Debts
2,395
3,505
3,884
2,591

Total
sharehold
er's
equity
2,
660
2,
660
2,
660
2,
850

Ratio
0.90
1.32
1.46
0.91

Standard debt equity ratio is 1:1.

from the above ratio's, it is clear that Co has very good debt
equity ratio.
It is a good indicator for investor and management as there holding in the Co
is strong.
4.Debt to capital Ratio = Total Debt / Total Debt + Total

shareholder's equity

Yea
r
201
2
201
3
201
4
201
5

Total Debt
2,395
3,505
3,884
2,591

Total
Debt+Tot
al
sharehold
er's
equity
5,
055
6,
165
6,
544
5,
441

Ratio
0.47
0.57
0.59
0.48

It's a another way of looking capital & debt

ratio.
In these method Capital= All long term & short term
debts.
5.Debt to Assets = Total Debt / Total

Assets
Yea
r
201
2
201
3

201
4
201
5

Total Debt

Total
Assets

Ratio

2,395

5,290

0.45

3,505

6,623

0.53

3,884

7,158

0.54

2,591

6,688

0.39

It indicates the ability of the co to pay debts through its assets sale if
required.

In 4 yrs comparison, Co ability to pay has not fallen

below Rs 1.
All are the above are good indicator of good management practices & good policy & bussiness
in a right direction.
6. Interest Coverage Ratio = Earnings before Interest &
Taxes / Interest Payment

Yea
r
201
2
201
3

Earnings
before
interest &
taxes

Interest
payment

Ratio

1,298

255

5.09

1,228

377

3.26

201
4
201
5

73
9
1,252

453

1.63

394

3.18

The Co's ability to pay interest have increased in each

coming year.

The Co is managing its debt properly by regular payment of interest &

principle amt.
The higher the interest coverage ratio, the more secure the loan
lender feel.
8.Return on Assets = Net Income /
Total Assets
Yea
r
201
2
201
3

Net Income

Total
Assets

Ratio

13,051

5,290

2.47

12,561

6,623

1.90