Goldilocks moment for Mitsu Chem Plast reports two-fold jump in net profit; stock locks at upper circuit

Mitsu Chem Plast Limited is a certified polymer-based moulded products manufacturing company, engaged in the business of manufacturing & marketing of technically-driven innovative products. The company caters to the growing industry sections like industrial packaging solutions, automotive components, healthcare products, infrastructure-related products & emergency handling solutions with in-house testing as well as quality control systems & machines.  

The company has declared its Q1FY22 earnings. Its revenue for the quarter ended June 30, 2021, jumped 83 per cent YoY to Rs 59.5 crore. EBITDA soared 52 per cent YoY to Rs 7.9 crore while the net profit jumped two-fold to Rs 3.7 crore. Interestingly, for Q1FY22, finance cost was reduced by 14.6 per cent to Rs 1.35 crore.   

Interestingly, the total plastic consumption in India is around 15 million tonnes and is expected to go up to 25 million tonnes in the next seven years. The industry is expected to grow at a CAGR of 10-12 per cent. The per capita consumption is expected to double, with an investment of USD 80 billion over the next five years. Availability of polymers has become very easy in the domestic market. Also, investments in lateral industries such as food processing, cold storage & material handling, infrastructure & housing, agriculture, water management and retailing are acting as drivers for the growth of the plastics industry.  

More than 30 clients of Fortune 500 are serviced by the company.   

The stock is up by 142.90 per cent on a YTD basis and in the last one year, it has surged 177.60 per cent. Currently, the stock is on the verge of breaking out of a cup with a handle pattern!