Kanpur Plastipack in focus after it plans to sell CPP division assets worth over ₹49 Cr

The shares of this micro-cap packaging stock engaged in manufacturing woven sacks, bags, fabrics, and yarn, surged after receiving approval for the Rs.49 crore sale of assets from its Cast Polypropylene (CPP) division to streamline operations and optimize the company’s asset portfolio. 

Price Action 

During Tuesday’s trading session, the share price of Kanpur Plastipack Limited reached an intra-day high of Rs.129.70 per share, rising 5.5 percent from its previous close of Rs.122.92 per share. However, the stock declined later to Rs.126.47 each. 

What is the news

Kanpur Plastipack Ltd’s Board has approved the sale of its CPP division’s plant and machinery, citing non-viable manufacturing operations. The plant, situated at Gajner Road, Kanpur Dehat, generated a turnover of Rs.20.13 crores in 2023-24. The decision aligns with the company’s strategic move to optimize its operations.  

The plant and machinery will be sold to SRF Limited for Rs.49.25 crores, representing nearly 20 percent of Kanpur Plastipack’s market capitalization. The transaction is subject to shareholder approval and is expected to be completed by October 30, 2025, pending fulfillment of agreement conditions.

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Business Overview

KPL is an industrial bulk packaging solution provider with a fully integrated end-to-end manufacturing setup. With a business legacy spanning three generations, the company offers a diversified product range, including Flexible Intermediate Bulk Containers (FIBCs), PP fabrics, woven sacks, Polypropylene (PP) High Tenacity Multifilament Yarn (MFY), UV Master Batch, and Cast Polypropylene Film (CPP).  

It is engaged in the manufacturing and export of FIBCs, bulk bags, and MFY, catering to a global customer base. Equipped with advanced facilities and technical expertise, the company aligns its manufacturing processes with international standards.

Earnings Report

According to its recent financial updates, Kanpur Plastipack Ltd reported remarkable consolidated revenue of Rs.160.81 crores in Q3 FY25, marking a 31 percent increase from Rs.122.92 crores in Q3 FY24. In addition, the company saw a significant surge in net profit to Rs.7.47 crores, compared to net loss of Rs.6.74 crores in the same period last year.

Ratio Analysis

The company has a Return on Capital Employed (ROCE) of 4.04 percent and a Return on Equity (ROE) of (1.78) percent. Its Price-to-Earnings (P/E) ratio stands at 25.1, higher than the industry average of 16.51. Furthermore, the company maintains a current ratio of 4.86, a debt-to-equity ratio of 1.24, and an Earnings Per Share (EPS) of Rs.4.89. 

Written by – Siddesh S Raskar

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