Shaily Engineering Plastics - Robust Recovery, Order Book In Place: ICICI Direct

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ICICI Direct Report

Shaily Engineering Plastics Ltd. reported a fairly strong performance in Q2 FY21 and Q3 FY21, helping cover up its revenue losses occurred due to pandemic related lockdowns in Q1 FY21.

Further, the company has guided a strong order pipeline that provides revenue visibility for the next two years.

With better operating leverage and a complete pass on the mechanism of inflationary pressure to its clients (with a lag of three months), we believe Ebitda margin may improve ~100 basis points in FY20-23E.

Better cash flows, going forward, will be utilised to fund the future capex and reduce debt (H2 FY21 debt at ~Rs 134 crore).

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