- Material handling crates, containers and bins. One will find Nilkamal plastic crates in vegetable markets, dustbins in cities etc
- Plastic Moulded furniture - chairs, tables etc. This is where the company started from. At a lot of weddings in India, one will notice that plastic chairs are Nilkamal.
- @Home - Home Store retail chain.
The retail chain is making losses. The moulded plastic items business is very profitable, and the company has done very well over the past decade to become a market leader. On a consolidated basis, the company is trading in mid single-digit PEs. If one does a SOTP and values the plastic biz and @Home separately, then the plastic biz is trading at low single digit PE. It is a levered company - market cap of 130 crore, debt of around 300 crore. Levered companies benefit when interest rates go low - as is the situation today - due to lower interest expense. The potential appreciation in a leveraged company's stock is higher than in an unleveraged one (so are the losses). On an asset value basis, the stock can easily be a double.
Risk with this stock is - it is a small cap. If markets start falling, these stocks just do not find any buyers.
Disclosure: Own Nilkamal. Positions might change at any time.