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Check Before You Invest : Jalpac India Ltd

BSE: 523230 NSE: ISIN: INE976B01011
  |   Sector:  Chemicals & Fertilizers   |   Industry:  Plastic Products

Snapshot

Q.1 Which industry/sub-sector does Jalpac India Ltd belong to?
Jalpac India Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Plastic Products segment.
Q.2 Is Jalpac India Ltd a good quality company?
Jalpac India Ltd is a quality company, based on a multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Jalpac India Ltd undervalued or overvalued?
Jalpac India Ltd appears Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings - -
Price to Book -0.12 -0.12
Price to Sales 0.32 0.32
EV to EBITDA -20.26 -20.26
Q.4 Is Jalpac India Ltd a good buy now?
Jalpac India Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Jalpac India Ltd?
Jalpac India Ltd revenue growth is -38.5% for FY-2013, which is below its 5-year CAGR of 11.61%, indicating slower growth.

Q.2 Gross Profit margin of Jalpac India Ltd?
Jalpac India Ltd Gross profit margin which is the profit after deduction of direct costs, is -15.4% for FY-2013, which is below its 5-year median of -0.6%, indicating decreasing margins.

Q.3 Operating Profit Margin of Jalpac India Ltd?
Jalpac India Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -13.41% for FY-2013, which is below its 5-year median of -1.33% indicating decreasing margins.

Q.4 Net Profit Margin of Jalpac India Ltd?
Jalpac India Ltd Net Profit Margin is -30.49% for FY-2013, is below its 5-year median of -13.23%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -15.4 -0.6
Operating Profit Margin (%) -13.41 -1.33
Net Profit Margin (%) -30.49 -13.23

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Jalpac India Ltd?
Jalpac India Ltd Return on Asset is -22.24%, which is below its 5-year historical median of -8.23%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Jalpac India Ltd?
Jalpac India Ltd Return on capital employed is -65.63% for FY-2013, which is below its 5-year historical median of -19.6%. The current ROCE is below its estimated weighted average cost of capital (WACC) of %, indicating value preservation.

Q.7 Cash conversion cycle of Jalpac India Ltd?
Jalpac India Ltd Cash conversion cycle is -82 days, below its 5-year historical median of -75 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.

C: How much debt does the business have and is it at a sustainable level?

Q.8 Debt to Equity ratio of Jalpac India Ltd?
Jalpac India Ltd Debt-to-Equity ratio is -1.13, which is lower the industry average of 0.25, indicating lower debt levels in the industry.

Q.9 Debt to cash flow from operations of Jalpac India Ltd?
Jalpac India Ltd Debt to cash flow from operations is -1658.2, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Jalpac India Ltd?

Q.1 Promoter shareholding and pledge status of Jalpac India Ltd?
Promoters hold 59.62% of the Jalpac India Ltd, with 85.20% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Jalpac India Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Jalpac India Ltd vs industry peers?
Jalpac India Ltd revenue CAGR is 11.61%, compared to the industry median CAGR of 4.71%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -38.5 4.7
Gross Profit Growth (%) -685 14.3
Operating Profit Growth (%) -687.5 10.1
Net Profit Growth (%) 0 18.7
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.75 1.06
ROE (%) - 5.91
ROCE (%) -65.63 8.75
Cash Conversion Cycle (days) -82.16 77

Valuation & price assessment

Q.1 Stock return of Jalpac India Ltd over the last decade?
Over the last - year(s), the stock has delivered a CAGR of N/A% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - -
Q.2 Valuation ratios of Jalpac India Ltd vs historical?
The current P/E ratio of 0 is in line with than its historical median of , indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings - - 22.05
Price to Book -0.12 -0.12 1.89
Price to Sales 0.32 0.32 1.33
EV to EBITDA -20.26 -20.26 10.86

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