Book Full Profit - Wim Plast

Wim Plast was a part of our recommendations in Issue No 7 dated March 15-28, 2010. The scrip was recommended at a price of Rs 169.70 in our column ‘Choice Scrip’ and carried a one-year price target of Rs 221. Once again the scrip has outperformed our expectations by quite a mile and it achieved its target in a matter of three months, which is quite commendable. Impressively so, the scrip has touched a high of Rs 235, thereby providing an overall appreciation of 38.48 per cent, while at its CMP of Rs 218 the current appreciation is 28 per cent. The Sensex during the same period is up by mere 5 per cent.

Wim Plast is into manufacturing of plastic moulded and extruded articles. It has products such as plastic moulded furniture and bubbleguard sheets with market share of around 11-12 per cent. Peers include Nilkamal and Supreme Industries with 20 per cent and 11 per cent market share respectively. The balance belongs to players in the un-organised market.

Factors such as its growth at a three-year CAGR of 64 per cent in profits, continued brisk progress in 9MFY10, consistent dividend payment since 1998, a dividend yield of 2 per cent, zero debt status and low valuations of PE of just 6x made us recommend Wim Plast. And considering the fact that the scrip has performed well beyond our expectations and has crossed the target too, it makes sense to book full profit.