Pyramid Technoplast Limited IPO

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i. Pyramid Technoplast  is an industrial packaging company engaged in the business of manufacturing polymer based molded products (Polymer Drums) mainly used by chemical, agrochemical, speciality chemical and pharmaceutical companies for their packaging requirements. They are one of the leading manufacturers of rigid Intermediate Bulk Containers (IBC) in India manufacturing 1,000 litre capacity IBC. IBCs are industrial-grade containers engineered for the mass handling, transport, and storage of liquids, semi-solids, pastes, or solids. rigid IBCs are manufactured across a volume range which is in between that of standard shipping drums and intermodal tank containers, hence the title intermediate bulk container. They also manufacture MS Drums made of mild steel (MS) used in the packaging and transport of chemicals, agrochemicals and speciality chemicals.

ii. The company use blow molding technology to manufacture Polymer Drums and IBCs. Injection molding technology is used for manufacturing caps, closures, bungs, lids, handles, lugs, etc. for in-house use. Their products are marketed and sold under their brand name “Pyramid”.

iii. Pyramid Technoplast have obtained UN certification for IBC and MS Drums to meet safety levels outlined by United Nations Recommendations on the Transport of Dangerous Goods, in order to transport them safely (by road, rail, sea and air). Theirr manufacturing units are ISO 9001:2015/ ISO 14001:2015/ISO 45001:2018 certified by quality, environment, health and safety management systems for the manufacture of Polymer Drums, carboys, jerry cans, IBC & MS Drums and accessories connected thereto.

Competitive Strengths:

i. Diverse customer base
ii. Comprehensive product portfolio
iii. Strategic location of our manufacturing units.

Objects of the Pyramid Technoplast Limited IPO:

The company intends to utilize the net proceeds from the issue towards the funding of the following objects: i. Repayment and/or pre-payment, in full or part, of certain outstanding borrowings availed by the company, ii. Funding working capital requirements of the company, and iii. General corporate purposes.  

Pyramid Technoplast Limited IPO Details:

Open Date: Aug 18 2023
Close Date: Aug 22 2023
Total Shares: 9,220,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 153.05 Cr.
Lot Size: 90 Shares
Issue Price: ₹ 151 - 166 Per Equity Share
Listing At: NSE,BSE
Listing Date: Aug 29 2023

Promoters And Management:

Bijaykumar Agarwal, the Managing Director & Chairman of the Company. He has been associated with the Company since 2002. He was appointed on the Board with effect from February 2023. He has over three (3) decades of experience in packaging industry. He looks after various functions in the Company such as finance, raw material procurement, customer servicing and business development. Jaiprakash Agarwal, the Whole-time Director & Chief Financial Officer of the Company. He holds a bachelor’s degree in commerce from the Mumbai University. He also holds master’s degree in business administration from the ICFAI University, Dehradun. He has been associated with the Company since June 2003. He has over nineteen (19) years of experience in the packaging industry. He looks after various functions in the Company such as manufacturing, finance, accounts, sales & marketing and business development. Madhu Agarwal, the Whole-time Director of the Company. She holds a bachelor’s degree of commerce from the Calcutta University. She has been associated with the Company since May 2006. She has over sixteen (16) years of experience in human resource compliance and administration. She looks after human resource, administration and compliance related activities in the Company.

Financials of Pyramid Technoplast Limited IPO:

A. Balance Sheet
Particular (In Lakhs) Mar-21 Mar-22 Mar-23
Equity Share Capital 391.06 391.06 3,128.48
Reserves 4,494 7,129 7,597
Borrowings 5,130 6,477 5,534
Trade Payables 4,150 3,160 4,943
Other Liabilities 1,181 1,219 1,376
Total Liabilities 10,461 10,855 11,853
Net Block 5,030 4,854 6,143
Capital Work in Progress 0 245 726
Investments 105 101 288
Other Assets 576 386 270
Total NC Assets 5,710 5,585 7,427
Receivables 6,436 7,511 7,697
Inventory 2,157 3,745 4,550
Cash & Bank 458 350 579
Other Assets 584 1,185 2,326
Face value 10 10 10
B. Profit & Loss Statement
Particular (In Lakhs) Mar-21 Mar-22 Mar-23
Sales 31,350 40,042 48,003
Raw Material Cost 22,991 29,863 36,333
Change in Inventory -10 9 -48
Employee Cost 1,475 1,570 1,755
Other Expenses 3,912 4,379 4,979
Other Income 267 223 200
Depreciation 439 442 493
Interest 522 485 405
EBITDA 3,250 4,443 5,183
EBITDA Margin 10.37% 11.10% 10.80%
Profit before tax 2,289 3,516 4,281
Tax 590 901 1,105
Net profit 1,699 2,615 3,176
NPM (%) 5.37% 6.49% 6.59%
C. Cash Flow Statement
Particular (In Lakhs) Mar-21 Mar-22 Mar-23
Cash From Operating Activity
Profit From Operation 3,134 4,350 5,103
Receivable -1,533 -1,075 -186
Inventory -744 -1,588 -805
Payable 587 -990 1,783
Loans And Advances -2 -27 4
Other WC Items -23 -353 -1,150
Working Capital Changes -1,716 -4,034 -354
Direct Taxes -580 -920 -853
Net Cash Inflow from Operating Activity 839 -604 3895
Cash from Investing Activity
Fixed assets purchased -705 -481 -2,234
Fixed assets sold 8 5 7
Investments purchased 0 -0.9 -191
Other investing items 24 26 26
Net cash inflow from investing activities -673 -451 -2,392
Cash from Financing Activity
Proceeds from borrowings 1,627 4,028 2,470
Repayment of borrowings -1,141 -2,681 -3,412
Intrest paid fin -436 -424 -331
Net Cash Flow 216 -132 230
 

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Pyramid Technoplast Limited 480 32 8.6 19.2 166 611
Time Technoplast Limited 4289 224 9.7 14.3 139 3140
TPL Plastech Limited 271 16 2.06 20.6 43 337
Mold-Tek Packaging Limited 730 80 24.3 41.6 971 3,221
* All the data as per FY23.

Recommendation on Pyramid Technoplast Limited IPO:

Review and Recommendation of Pyramid Technoplast by IZ team is 5/10 1. Overview of the Company a) Business Model: Pyramid Technoplast is prominently in the industrial packaging business, catering to several sectors like chemical, agrochemical, specialty chemical, and pharmaceutical companies. b) Product Line: The company's product portfolio includes Polymer Drums, rigid Intermediate Bulk Containers (IBCs) of 1,000-liter capacity, and MS Drums made of mild steel. Their IBCs fill a niche requirement that sits between standard shipping drums and intermodal tank containers. c) Manufacturing Technology: Pyramid Technoplast utilizes blow molding technology for its Polymer Drums and IBCs and injection molding for other accessories. d) Brand: The products are sold under the brand name "Pyramid", which can be a significant asset if it has good market recognition. 2. Growth and Expansion: The company has shown consistent growth in its infrastructure with six operational units and a seventh under construction. This indicates a strategic expansion approach. 3. Promoters: a) Bijaykumar Agarwal: As the MD & Chairman with three decades in the packaging industry, he provides significant experience, especially in finance, raw material procurement, customer servicing, and business development. b) Jaiprakash Agarwal: As the Whole-time Director & CFO, he has a sound educational background and almost two decades of experience in the packaging industry. His role in manufacturing, finance, accounts, sales & marketing, and business development is pivotal. c) Madhu Agarwal: Her 16 years of experience in human resource compliance and administration makes her a valuable asset for the company, especially in HR and compliance matters. 4. Financials a) Sales Growth: A consistent growth in sales over the three years, which is a positive sign. b) Raw Material Cost: This cost has been increasing, but it aligns with the sales growth. c) Profitability: Both EBITDA and Net Profit Margin have shown improvements, signaling operational efficiency. d) Debt: Interest expenses have been decreasing, which indicate a reduction in debt or better debt management. 5. Valuation The IPO's P/E ratio of 19.2x in comparison to the industry peers and a market cap of 600 Cr seems reasonably priced. 6. Conclusion a) Strengths: Pyramid Technoplast has shown consistent sales growth, expanding infrastructure, experienced management, and improving profitability. b) Concerns: The increase in raw material costs needs to be monitored, as it can impact margins if not managed effectively. c) Valuation: The valuation seems reasonable. d) Final Verdict: The company appears to be on a stable growth trajectory with robust management at the helm. As valuation is align with the peers, it might be a good opportunity for investors. However, as always, potential investors should consider their risk tolerance, investment horizon, and perform further due diligence before making an investment decision.

Company Address:

Pyramid Technoplast Limited Office No.2, 2nd Floor, Shah Trade Centre, Rani Sati Marg, Near W.E Highway, Malad (East), Mumbai - 400 097 Phone: +91 22 4276 1547 Email: cs@pyramidtechnoplast.com Website: https://pyramidtechnoplast.com/

Discussion on Pyramid Technoplast Limited IPO:

7 Comments

    It’s peer is time technoplast which is available at a lower valuation
    Why apply here instead of directly buying time technoplast

    Polymer including polypropylene and polyethylene is the primary raw material used to manufacture the polymer based molded products and constitutes a significant percentage of the total expenses of the Company.

    These raw materials are derived from crude oil and is therefore subject to major price fluctuations in crude oil…..

    1. In 2014 – Company had a Revenue of 133 Cr and PAT of 1.16 Cr.

    2. In 2023 – Company has a Revenue of 480 Cr and PAT of 31 Cr.

    So, in the last 9 years, the company Revenue has grown by CAGR of 15% which is a decent growth…

    1. In 2019 – Company had a Revenue of 234 Cr and PAT of 2 Cr.

    2. In 2023 – Company has a Revenue of 480 Cr and PAT of 31 Cr.

    So, in the last 5 years, the company Revenue has grown by CAGR of 19% which is a decent growth…

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