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PHYSICAL

DALMIA LAMINATORS Essentials

DALMIA LAMINATORS Growth

Compounded Sales Growth

1 Year

3 Year

6 Year

Compounded Profit Growth

1 Year

4 Year

6 Year

Return On Equity

2018

2020

2023

Highlights

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Growth:

• Packaging business performance was negatively impacted by excess capacity and reduced demand in Europe stemming from the Russia-Ukraine conflict. The combined effects of excess capacity, rising energy costs, EMI costs, and interest rates led to a decline in consumption.

• Revenue for FY23 decreased by 2% compared to the previous year due to a global economic slowdown triggered by macroeconomic disturbances (Russia-Ukraine conflict) and interest rate hikes. Despite the challenges, the company maintained a consistent 5-year CAGR of 9%.


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Profitability:

  • Excess capacity and aggressive rate hikes by central banks have caused a decline in demand for packaging films as consumers reduce spending to cover higher energy bills and mortgage EMIs. This decline in demand has occurred simultaneously with the entry of new capacity into the market.

  • Despite these challenges, Net Profits grew 8% in FY23 due to increased profitability. Operating Expenses fell 6% year-over-year in FY23.

  • The year-on-year growth of PAT (Profit After Tax) was 8%, maintaining a 5-year CAGR (Compound Annual Growth Rate) of 12%.

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Investment Thesis:

  • The packaging business faced significant supply-chain disruptions due to overcapacities and the ongoing situation in Europe resulting from the Russo-Ukraine conflict.

  • EBITDA declines for some companies in the packaging industry reached up to 80% between Q3 and Q4 FY23, with more prevalent declines ranging from 30% to 50%. Q3 was the most severely affected quarter, while Q4 witnessed notable improvement.

  • The industry has implemented sizing adjustments to address the challenges. Anticipated improvements in the packaging film business are expected in the next quarter or so.

  • May, 2023 is showing encouraging sizing trends, though not yet at the level of Q1 FY23. Government focus on infrastructure projects will boost cement demand, driving demand for the company's products.

  • The company's P/E ratio of 13x, compared to the industry average of 24x, indicates undervalued status, presenting a promising investment opportunity with a target of ₹ 500. Peers taken for consideration are EPL Ltd, AGI Greenpac, Garware Hi-Tech, Polyplex Corpn, Uflex, Jindal Poly Film, Huhtamaki India, TCPL Packaging, Cosmo First, Everest Kanto, Ester Industries, Pyramid Technopl, Sh. Jagdamba POI, Nahar Poly. However, kindly note that the company has not shared any vision to bring an IPO soon, hence the exit strategy seems to be low in the respective company. 

Business Rating

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Managment
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Accounting Practice
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Profatibility
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Solvency
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Growth
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Valuation
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Over all Ratings
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Recommendation
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Our Team

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Ms. Sonam Jalan


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Mr. Parekh Mani Baro
Non Executive Non Independent Director


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Quantity

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, Min. Investment: ₹