1. Independent view on Sintex industries.
Independent view on Sintex industries

2. Basic Information Ticker Symbol – SINTEX
Primary exchange – National Stock Exchange & Bombay stock exchange
Industry & Sector – Manufacturing (Textile & Plastic)
Recommendation – Buy
Current stock price – 74.80
Market Cap – 3346 Cr
Target Price – 93.90
Margin of safety – %

3. Investment summary Overview
Sintex Industries Limited formerly The Bharat Vijay Mills Ltd. has two divisions – textiles and plastics. In the area of textiles, The pioneers in high value fabrics.
The plastic division was started in the year 1975 and today the division have most diversified manufacturing capabilities in plastic processing in the world.
Sintex has an effective network of 10 manufacturing plants, 12 branch offices, over 500 distributors and around 10,000 retailers spread across India
Recent Development
Prefab Homes, Gloria Siding Panels
Package Sewage Treatment Plants (PSTP) & Manhole
Sandwich Panels & UL Listed for FRP Underground Petroleum Tanks
ISO 9001 Certification Monolithic Concrete Construction Technology

4. Investment summary Conti…….
Value of equity share as per DCF approach Rs 93.93
Recommended Action : BUY

5. Investment summary Conti…….
The market has mispriced the equity share because of the question on growth and 4000 Cr Cr (19th may, 2016) debt. and may be because of some internal news on the upcoming numbers for the next quarter/year.
The market is not properly discounting the future earnings of the company. Consensus believes that the earnings for the future years will be low and there will be a risk of high debt.
The catalyst to the stock price increase in the future should be the performance of the company because the company is the pioneer in plastic & water storage solutions, as per the economic outlook of India, a huge need of housing and water consumption gives wings to the company for growth. the positioning of Sintex brand and innovative products will contribute to the growth of the company.

6. Business description Overview :-
Sintex Industries Limited formerly The Bharat Vijay Mills Ltd. has two divisions – textiles and plastics. In the area of textiles, The pioneers in high value fabrics.
The plastic division was started in the year 1975 and today the division have most diversified manufacturing capabilities in plastic processing in the world.
Sintex has an effective network of 10 manufacturing plants, 12 branch offices, over 500 distributors and around 10,000 retailers spread across India
Products :-
Water Storage solutions
Interiors
Electrical SMC
Environmental & Green
Industrial
Prefabs

7. Management MANAGEMENT TEAM
Dinesh Patel Chairman • B.Sc From Bombay University • More than 6 Decades of experience
Arun P.Patel Vice-Chairman • B.Sc From Bombay University • More than 6 Decades of experience
Rahul A Patel Managing Director • Bachelors degree in Communications. • MBA from USA. • More than 28 years experience in textile and plastic

8. Amit D Patel Managing Director • Bachelors degree in commerce • MT from USA • 23 years of experience in textile, chemical and plastic
S B Dangayach Managing Director • B.Sc (Hons). • P.G.D.B.A from IIM Ahmedabad • 3 decades of experience in plastics
L.M. Rathod Group CFO & CS • Graduate in commerce and law, MBA and FCS • 3 decades of experience in corporate finance, company law and taxation
Samir Joshipura Group CEO • Graduate in Engineering and MBA from SPJIMR • 17 years of Executive Leadership experience in Strategy and Business Transformation across industries, pre-dominantly in Manufacturing

9. INDUSTRY OVERVIEW
Industry overview :- The plastics sector Over the past 57 years, the plastics industry in India has made rapid strides. A modest but promising beginning with the production of polystyrene, was followed by LDPE, PVC, HDPE I and finally polypropylene. Such an immense growth potential motivated entrepreneurs in the country to improve technical expertise, enhance quality standards and build capacities to make the most of the booming plastics industry.
Source : PlastIndia

10. The Indian plastic industry has set a 20-20-20 vision
The Indian plastic industry has set a vision. According to this, it is expected that plastic processing in India could reach the 20 million tonne-mark by 2020 from the current 8.5 million tonnes. And, with plastic products rapidly pervading all walks of human life - domestic and industrial – the per capita consumption of plastic in India is expected to touch 20 kilograms by 2020 from about 9.7 kilograms currently. Industry overview :- The textile sector India is a dominant player in the global textiles and garments space. It is one of the few nations in the world with a strong presence across the entire textile value chain from natural and synthetic fibres through yarn and fabrics up to garments, thus holding a diversified and competitive position in the global market.
2nd largest producer of textile and garments in the world.
2nd largest cotton producer.
1st global leader in jute production.
5th largest global exporter.
The Indian textiles sector is one of the mainstays of the national economy. It is also one of the largest contributing sectors to the nation’s exports accounting for about 11% of its total exports. the textiles industry is labour-intensive and is one of the largest employers.

11. Valuation

12. Financial analysis Margin/profitability ratios 2013 2014 2015
Gross margins
41.54%
40.08%
39.41%
Operating profit margins
11.47%
12.39%
13.71%
ROE(%)
12.09%
11.74%
14.98%
EBIT margins(%)
12.29%
10.32%
12.97%
PAT margins(%)
6.70%
6.20%
6.12%
ROA(%)
4.34%
4.32%
5.16%
ROIC
8.32%
10.61%
11.05%
Performance/ efficiency ratios
2012
2013
2014
2015
Average Collection Period
134
126
128
118
Days of Inventory on Hand 56 55 46 44
Average Payment Period 75 76 84 86
Operating Cycle (Days)
190
181
174
162
Cash Conversion Cycle
115
105 90 77