Huhtamaki PPL Ltd.

July 17, 2015 . Equities Desk

Established in the year 1935, Huhtamaki PPL (then Paper Products Ltd.), is amongst the most prestigious flexible packaging companies in India. The company became a part of the Huhtamaki Packaging Worldwide in 1999, which is one of the top 10 consumer packaging companies in the world. PPL offers a wide portfolio of packaging solutions that include Flexible Packaging, Labelling Technologies and Specialised Cartons. All this supported by the Packaging Machine Division to provide the customer with Total packaging solutions. With three state of the art, fully integrated manufacturing facilities at Thane, Silvassa, Rudrapur and Hyderabad, Huhtamaki PPL (HPPL) is capable of working with the customer from product inception to the super market.

Valuation and view

Huhtamaki PPL Ltd. is one of the most prestigious flexible packaging companies in India and is continuously taking up new  initiatives to expand its presence overseas to tap the vast potential in the global markets. With the recent acquisition of Positive Packaging Ltd., the manufacturing capabilities of HPPL are expected to increase considerably which in turn will increase the revenues for the Company. The Company is a market leader in the flexible packaging industry in India and has reputed clients like HLL, Colgate, Nestle, etc. It is expected that the projected growth rate of 15% in the flexible packaging industry will positively impact HPPL in the future.

At the current market price (CMP) of Rs. 314, the stock trades at a P/E of 17.6x CY15E and 16.6x CY16E. We recommend ‘BUY’
with a target price of Rs. 360, which implies a potential upside of ~15% to the CMP from 12 months perspective.

Research Report Huhtamaki PPL Ltd

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