Sintex Plastics Technology hit the bourses today after its demerger from Sintex Industries Ltd. The stock was trading up by more than 5% within one hour of its listing. The company came into existence after the board of directors of Sintex Industries had approved the scheme of demerger of custom moulding and prefabricated structured business into Sintex- BAPL and Sintex Infra Projects respectively, in September last year. Post the demerger, the two companies Sintex Industries and Sintex Plastics Technology were to carry the textile and spinning business and plastics business, respectively. The shareholding pattern of Sintex Plastics mirrors the shareholding pattern of Sintex Industries, with more than 30% equity stake owned by the promoters.
Yesterday, the Shares of Sintex Industries had advanced by more than 7% ahead of the listing of Sintex Plastics Technology. The equity shares of Sintex Plastics Technology is listed on the exchange in the list of T group (Trade-for-Trade) of securities. The stock is set to trade in this segment for 10 trading days. The stock was trading at Rs 124.5 on NSE, on Tuesday morning.
Sintex Plastics is mainly engaged in making prefabricated structures, custom moulding and storage tanks. This has been a very important segment, contributing nearly 90% of revenues and 84% of EBITDA before the demerger. Phillip Capital expects earnings per share of Rs 8.3 for the year ending March 2018 compared to Rs 7.7 in the previous year. In a note to clients, the research and broking company had expected the stock to trade at 12-15 times earnings after the demerger given its strong cash generation and return on capital employed.
As per the quarterly earnings reported by Sintex Industries, the company had posted a net profit of Rs 35.07 crore against net loss of Rs 2.55 crore in the corresponding quarter last fiscal. Net sales of the company stood at Rs 687.56 crore, registering an increase of more than 175 per cent when compared on a year-on-year basis. It had reported net sales of Rs 247.70 crore in the corresponding quarter last year.