NILKAMAL LTD – Darkhorsestocks

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Market Price at the time of suggestion – : 1428 Rs

Nilkamal Ltd is a 100% debt free company engaged in the business of Manufacture of Plastics Products and Retail sales. Nilkamal is one of the major players in moulded plastic products and material handling segments. The company manufactures and markets injection moulded plastic products in India and abroad.

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Incorporated in 1985 as Creamer Plastic a private limited company , it is promoted by Mr. Vamanrai Parekh and Mr. Sharad Parekh and later it was converted into a public limited company in Jul.90 . The Company has organized businesses into 2 categories viz Plastics and Lifestyle Furniture, Furnishings and Accessories. During the year 2019, the Company has three direct subsidiaries: Nilkamal Foundation in India, Nilkamal Eswaran Plastics Private Limited at Sri Lanka and Nilkamal Crates and Bins – FZE at UAE and one step-down subsidiary: Nilkamal Eswaran Marketing Private Limited at Sri Lanka; and two Joint Venture Companies: Nilkamal Bito Storage Systems Private Limited, which is the Indo-German Joint Venture and Cambro Nilkamal Private Limited, which is the Indo-US Joint Venture. From developed and sophisticated markets of North America and Australia, to developing markets in Africa, South America and GCC, Nilkamal products are available in as many as 30 countries.

Products / Business

From Plastic products to Complete Furniture Solution Provider Nilkamal furniture business has transformed from plastic furniture to complete furniture solution provider for home furniture, office furniture, education furniture, health care furniture and CSR furniture in various materials and upholstered products. Furniture business have four major verticals – Moulded furniture, Ready furniture, Mattress and KAT (Key Account Team- B2B Sales). The Ready Furniture business is serviced through 3 broad channels, namely, Exclusive Brand Outlets (EBO), Trade and Large Furniture Outlet (LFO) and E-commerce.

The Ready Furniture business is serviced through 3 broad channels, namely, Exclusive Brand Outlets (EBO), Trade and Large Furniture Outlet (LFO) and E-commerce. Ecommerce sale of Ready Furniture grew by more than 200%. EBO channel added 14 stores last year taking the total count of stores to 44. Most of the new stores are franchisee owned. The company added more than Fifty thousand sq.ft. of retail space last year. In order to improve trade and LFO business, the company had invested in local sofa manufacturers to ensure localization of design and reduction in cost.

The Bubble Guard division this year saw double digit growth and continues to be a growing product category. The packaging applications of Bubble Guard have contributed to growth driven by companies switching away from conventional packaging made of paper and wood towards a more sustainable and reusable alternative. During the lock down period we have also launched innovative Bubble Guard products like Travel Guard (Transport), Virus Guard (for office, cafeteria, Education) and patient bed, to help in fight against Covid-19.

Ecommerce: Company has been supplying crates, pallets, racks and material handling equipment to many ecommerce players for their fulfilment centres. Automation needs high precision racking products which we have geared up for. Company  also has developed smart boxes which can be used in return logistics, for transport of food, rations and other supplies.

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Pharmaceuticals: As this sector is increasingly moving towards using plastic pallets, company has developed special hygiene pallets and export pallets. Company also has racking solutions and material handling equipment compliant with GMP requirements to offer. 

Food processing, Dairy and FMCG: Nilkamal already has a whole range of crates, containers and pallets for these sectors. Company has taken this a step ahead by adding smart technology RFID tags for quick identifying and sorting of perishable essentials, saving huge costs and time for our customers. 

Fruits & Vegetables, Fisheries: Nilkamal has a huge range of products for these sectors. Its range of crates, pallets, racking solutions and equipment are there to help with transportation, storage in cold stores and exports of these perishables. 

Healthcare: Nilkamal’s vaccine carriers and cold boxes are ready to deliver the COVID vaccine once it is developed, all across the country, through the Ministry of Health and local health bodies

Sanitation & Hygiene: With sanitisation and hygiene the key words now on, Nilkamal has added to its range of waste collection and disposal bins, hand wash sinks and industrial cleaning equipment. FSSAI standards are going to be enforced more strictly and company is ready to meet the market demands of clean storage of perishables with its range of products for hygienic food transport and service. At company level they have differing large Capex in the immediate future, till situation looks favourable.

Lifestyle Furniture, Furnishing and Accessories Division: The Lifestyle Furniture, Furnishing and Accessories Division (@home) registered a revenue of ` 215 Cr in FY 2019 – 2020 against ` 210 Cr in last FY. The marginal growth came in the background of a very tough market condition where the overall economy saw a consistent decline quarter on quarter. At the end of the Financial year, @home had 26 stores across India with a total retail space of 3.25 lac sq.ft. The business consciously focused on adding Franchisee stores (FOFO) in the said Financial Year. 6 new FOFO stores were added in the year taking the total count to 8. The brand ventured into 4 new markets, namely, Lucknow, Madurai, Salem and Hassan in FY 2019 – 2020. The initial response from all these markets have been very positive for the brand. The balance 18 stores are owned and operated by the Company.

New Product Launches

The company is also planning to launch new product range which is exclusive for Small Office Home Office (SOHO).

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More than 15 new products were introduced in the year mostly in the value-added segment. The company appointed more than 200 additional channel partners and more than 2000 retailers to increase its reach for better market penetration and availability across the country. The company has been very aggressive in its pricing to wade off the competition from local players. 

Apart from that The company is focusing extensively on marketing & branding activities to increase awareness and visibility by improving its presence pan India through a nationwide distribution network and presence of dealers in all parts of the country, which will help in managing the complex supply chain network at lower cost compared to industry. The company has network of nearly 1000-pluschannel partners and over 15,000 dealers pan India.

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Going Forward

The company will support the EBO business with proper advertising inputs to drive business in the immediate catchment. For the FY 2020 – 2021 we are planning to add 25 additional Franchisee outlets which will add an additional 50000 – 75000 sq.ft. retail foot print in the market.

During the financial year 2019 – 2020, the company had invested significantly in establishing its presence in the mattress category. Television and Newspaper advertisement were done to improve awareness among consumers and activate new trade partners. The benefits of this are expected to flow in the coming period.

The Organized Furniture industry saw a significant disruption in the online space with many more consumers opting for online purchases. @home had invested significantly in the online space with specific new product development for the online channel, presence in all significant market places, an aggressive pricing strategy based on market mapping and a well targeted marketing campaign round the year to attract the online buyers and ensure a great buying experience. @home achieved 67% growth in the e-commerce business with `42 cr revenue in FY 2019 – 2020. 

Covid Effect

Loss in Q1FY21 but expects normalcy in business from Q3FY21 Nilkamalnet sales fell53% to Rs 251.34 crore for quarter ended June’20 compared to corresponding previous year period. Operating margins of the company were negative at 4% compared to 13.2% in Q1FY20resulting loss at operating level to Rs 10.03 crore compared to profit of Rs 70.854 crore.Other income rose9% to Rs 1.91 crore. Interest cost was up 5% to Rs 6.18 crore. Depreciation rose 11% to Rs 23.47 crore. PBT reported loss of Rs 37.77 crore. Net profit reported loss of Rs 28.95 crore compared to profit of Rs 31.07 crore.

The combined sales for the month of April & May, 20 was 25% which increased to 75% in month of June.  The sales of the Company’s plastic business stood at Rs 198.67 crore whereas the retail business @home’ stood at Rs15.39 Crore against Rs 449.58 crore and Rs 51.95 crore respectively.

The business operations of the Subsidiary & Joint venture companies were also impacted to a great extent, however, the business of the said Joint Venture and Subsidiary Companies is negligible as compared to the standalone business of the company.

Further the mattress business achieved sales of Rs 8.05 crore as against Rs 17.59 crore. While the sales of Bubbleguard business dropped to Rs 0.98 Crore vis-a-vis Rs 4.33 crore.

The slowdown in economic activity in view of the unprecedented lockdown to arrest the spread of COVID-19 pandemic impacted the business severely during the first two months of Q1FY21. 


For year ended Mar 20 

  • Net sales fell4% to Rs 2257.19 crore. 
  • Operating margins of the company rose 3.5% bps to 12.5%
  • Operating profit rose by 32% to Rs 281.19 crore.
  • Other income rose11% to Rs 14.42 crore. 

Capital Expenditure

The capex spend for Q1FY21 stood at Rs 3.58 crore, whereas the company estimates a total capital expenditure of approx. Rs 100 crore during FY20-21. The said expenditure will be towards increase in manufacturing capacity of Racking & Storage, MDF and Plastic business. 


The company anticipates a 100% normalcy in its business from Q3FY21 onwards. 

The Organised Furniture industry saw a significant disruption in the online space with many more consumers opting for online purchases. @home had invested significantly in the online space with specific new product development for the online channel, presence in all significant market places, an aggressive pricing strategy based on market mapping and a well targeted marketing campaign round the year to attract the online buyers and ensure a great buying experience. @home achieved 67% growth in the e-commerce business with `42 cr revenue in FY 2019 – 2020. 

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The healthcare crisis coupled with the liquidity crunch will see a shift of business from the unorganised to the organised market in the mattress business. The company intends to capitalise this trend by introducing new products at various price points. The Company will also go aggressive in appointing new dealers to increase the brand footprint across India. Exclusive Mattress outlets are planned in major cities to give consumer an experience of the range available with the Company

To boost manufacturing of the furniture in India, no import duty on raw materials like wood logs, saw wood, etc has been suggested. In the long term, the suggestion is to make the furniture sector organised with its ancillary units. The plan is also to make India a global furniture hub by bringing in plug and play infrastructure around the ports. All these will be big positive for Nilkamal in the long run.


Nilkamal is one of the largest manufacturer of material handling plastic crates and a leader in moulded furniture. The company had been hit hard due to covid-19 but it does not end here. The management is strong bullish on the future prospects of the company and so they have take capes of about 100 Crores during fy20-21. Further company is completely debt free with stable operating  margins in range of 10-13% and a solid Return on capital employed of above 20 % over past several years. Additionally there has been a negligible increase in the share holding of the promoters over past 2 quarters. Thus from a short term perspective the stock may remain volatile and coupled with market correction we can see some correction in the stock on account of the earnings/ results for the year ending March 2020 but beyond that the stock looks good to explore for long term based on the expected future projections of Fy 2021 and Fy 2022.

As usual users are requested to not rush into buying this stock on a immediate basis instead wait for a while or buy in a slow staggered manner.

Please note that above expressed are our own views. Users are requested to take their own decision regarding investments. No member of DARKHORSESTOCKS would be responsible for any loss.

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