Platinum Industries Limited operates as a leading manufacturer in the specialty chemicals sector, specializing in stabilizers. Its primary business focuses on PVC stabilizers, CPVC additives, and lubricants, catering to various industries such as PVC pipes, profiles, fittings, electrical wires, cables, SPC floor tiles, rigid PVC foam boards, packaging materials, and more. The company provides customized solutions directly to clients and through an extensive network of distributors. Furthermore, it participates in trading activities involving related commodity chemicals like titanium dioxide and PVC/CPVC resin. International markets also benefit from the company’s exports, facilitated through a distribution network spanning 12 locations across India.
Revenue Growth: The company witnessed significant revenue growth from Rs. 89.14 crore in fiscal 2021 to Rs. 234.06 crore in fiscal 2023, representing a compound annual growth rate (CAGR) of 62.04% over the three fiscal years.
Profit After Tax (PAT): PAT increased from Rs. 4.82 cr in Fiscal 2021 to Rs. 36.2 cr in Fiscal 2023, indicating a CAGR of 174.04% during the same period.
Year
Revenue
Total Assets
Profit (PAT)
2021
89.27
31.26
4.82
2022
337
84.48
17.75
2023
231
121
37.58
All values are in Cr.
Strengths and Risks of Platinum Industries IPO
Strengths:
Impressive Revenue Growth: The company demonstrated robust revenue growth, with its revenue from operations escalating from Rs. 89.14 cr in Fiscal 2021 to Rs. 234.06 cr in Fiscal 2023, representing a remarkable Compound Annual Growth Rate (CAGR) of 62.04% over the three fiscal years. Furthermore, its Profit After Tax (PAT) surged from Rs. 4.82 cr in Fiscal 2021 to Rs. 36.2 cr in Fiscal 2023, exhibiting a striking CAGR of 174.04% during the same period.
In-house R&D Facility: Operating an in-house Research and Development (R&D) facility spanning 3,351.82 sq. ft. in Palghar, Maharashtra, the company is well-equipped with an analytical laboratory and an application laboratory. This facility serves the purpose of product quality validation and facilitates the development of new compounds and grades, enhancing innovation and competitiveness.
Diversified Product Portfolio: Originating from PVC stabilizers and initially serving the PVC pipes industry (specifically in irrigation and water transport), the company has successfully diversified its product portfolio. It now encompasses pipes and fittings, rigid and semi-rigid films, window profiles, wires and cables, as well as other applications including medical and consumer goods, showcasing adaptability and market expansion.
Risks:
Single Manufacturing Facility: The company’s sole manufacturing facility located in Palghar, Maharashtra, exposes it to significant risks. Any localized social unrest, natural disaster, breakdown of services, or disruption in production at this facility could substantially impact the company’s business operations and financial stability.
Dependency on Few Customers: A considerable portion of the company’s revenue is reliant on a limited number of customers, amplifying vulnerability. Moreover, the absence of long-term agreements with these customers heightens risk, as any failure to sustain existing arrangements could adversely affect business performance. The top 10 customers collectively contributed 87.71% of total sales in FY 2021, 83.41% in FY 22, and 86.49% in FY 23.
Lack of Long-term Agreements with Suppliers: The absence of long-term agreements with raw material suppliers exposes the company to potential challenges in securing necessary materials timely and at reasonable costs. This could adversely affect its business operations, financial condition, and cash flows.
Negative Cash Flow: The company experienced negative cash flow from operations in FY 22, amounting to Rs. 14.89 cr. Continued negative cash flows in the future could significantly impact its operational results and financial stability.
Contingent Liabilities: The company carries certain contingent liabilities which, if realized, could have adverse effects on its business, financial condition, cash flows, and operational performance.
Legal Proceedings: Involvement in legal proceedings by the company, its Promoter, and its Directors poses risks. Adverse outcomes in these proceedings could tarnish the company’s reputation and negatively impact its business operations, financial standing, and cash flows.
Outstanding Unsecured Loans: The company has outstanding unsecured loans that are subject to potential recall by lenders at any time. As of various fiscal year ends, the outstanding unsecured loans amounted to significant sums, indicating potential liquidity risks.
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