Polyplex CorP

Polyplex CorP
CMP: Rs 162.90
Recommendation: Buy

First Global has initiated coverage on polyethylene terephthalate (PET) films manufacturer Polyplex with an outperform rating. "Polyplex currently trades at three times its FY08 (estimated) EPS, which is much lower than its global peers. The valuation appear dirt cheap for a company that is the fifth-largest in the world, has been around for a couple of decades, and is looking at massive capacity expansion," the First Global note to clients said.

"Add to this the fact that at its current market price of around Rs 175, Polyplex trades at a steep discount to its 70% subsidiary, Polyplex Thailand, which contributes around 75% of its total volumes sold. At Polyplex Thailand's current market cap of $134 million on the Thailand Stock Exchange, the per share value of Polyplex's 70% stake comes to around Rs 260 per share," the note added.