Ester Industries

The company is a leading manufacturer of polyester films and engineering plastic compounds. Its polyester films are marketed under the brand ‘UmaPET' and engineering plastics marketed under the brand ‘Estoplast’.  The company had a poor Q2FY15 performance, beginning with the fall in topline. Net sales dropped 4% (YoY) at Rs.239 crore and net profit fell by a whopping 82% at a meagre Rs.91 lakh. EBITDA dropped 21% at Rs.19 crore, with margin falling from 9.64% to 7.5%. The huge interest burden of Rs.10 crore aggravated the fall in topline.

The company has two divisions – Polyster Chip/films and engineering plastic. The latter did well but the mainfray, Polyester did poorly with its revenue declining 8% and EBIT falling 28%. This division contributes 84% to the net sales. Unless there are some bumper orders during the year, it will end FY15 on a dull note with H1FY15 net profit halving to Rs.3 crore from Rs.6 crore in H1FY14. Equity base is pretty heavy at Rs.31.32 crore and annualized EPS stands at around Re.1 (face value Rs.5).