Glory Polyfilms Ltd

Those who are holding Glory Polyfilms Ltd should continue to do so. The company has completed the first phase of expansion and installed 7 layer machine. It is also going to install 3 layer machine. The second phase of expansion is going to complete by the end of this year. One of the points which most of the investors have ignored is that the stock has a P/E of only 8.41, while the industry P/E is 23.18. Hence if we go by simple arithmetic, Glory Polyfilms Ltd should be trading at least at Rs.60—Rs.66, if not higher.

Now if we consider expansion and other associated factors, the stock should sail past Rs.100. Another thing which is interesting is that Glory Polyfilms Ltd last year issued warrants, convertible within 18 months into equities of Rs.10 each, to five non-promoters and promoter entities/individuals at a price of Rs.108 (one hundred eight as compared to its CMP of Rs.26.90) each; though the issue size was reduced to 16-lakh warrants instead of 26-lakh proposed initially.

The company is using the proceeds to part-fund its Rs.140 Cr capex. The company, which manufactures three- and five-layer laminated films, used in the packaging industry, will now start manufacturing, the seven-layer films which is expected to take it in the new groove. It is also increasing laminating/printing capacities. The company would be coming up with Q4FY09, results very soon.