GRP Limited Research Report

Q3 FY 2022 Review

GRP Limited reported net revenue of ₹9,341.96 lakhs for the quarter ended December 31, 2021, as compared to ₹9,005 lakhs for the quarter ended December 31, 2020. EBIT and Profit After Tax was ₹108.04 lakhs and ₹79 lakhs for the quarter ended, December 31, 2021, as compared to ₹ 2,331.91 lakhs and 164.17 lakhs during the corresponding quarter of the previous year.

Investment Summary

Overview

• One of the top three manufacturers of reclaimed rubber globally and the largest in India.

• 7 manufacturing units with 76,100 tons/year capacity.

• 18% share in Indian Market & 50% India’s Export in reclaimed rubber.

• GRP Limited supplies to 7 out of the top 10 global tyre companies.

• Invested ₹15.25 Crore towards enhancing production capacity in the Engineering Plastic Division and Polymer Composite Division.

Quarterly Summary

Business

• GRP Limited, established by Mr. Rajendra V Gandhi in 1974, manufactures reclaimed rubber (recycled rubber) from end-of-life tyres and tubes. Having commenced operations as a tyre recycling company, GRP has transformed into sustainable materials company over the years. It also separates nylon tyres to produce raw material for sale to the engineering plastic components manufacturers in the automotive and electrical applications. The residue rubber from the above business is further used by other businesses with recycled plastic waste to produce composite material, which replaces wood and concrete.

• The GRP Limitedcompany is a leader in the domestic tyre recycling industry, and amongst the top five manufacturers of the reclaimed rubber.

• GRP has total installed capacity of 76,100 tons per year across all business segment.

• GRP Limited operates in following segments:

  • Reclaim Rubber: This is the core business, as company procures tyres at its End-of-Life (EOL), to produce reclaimed rubber (a replacement to Natural & Synthetic Rubber), used predominantly by tyre manufacturers.

  • Engineered Plastics: Another business recovers Polymide waste from tyres and along with other forms of EOL waste to produce Engineering Plastic compounds for sale to the plastic manufacturers in the automotive and electrical applications.

  • Polymers Composites: The residue rubber from the above businesses is used by yet another business to blend with recycled plastic waste to produce composite material which replaces woods & concrete. The applications for these composite boards are mainly in the transportation industry and currently limited to North America only.

  • Tyre Retreading: A commercial Vehicle retreading business in Joint Venture with a global company, Maragoni SpA to help fleet owners’ life of their type by providing additional life.

• GRP Limited Revenue dropped by 20% in FY 2021, compared to previous year. Contribution of revenue in FY 2021 from reclaim rubber business was 93 % and from ‘Others’ was 7% as compared to 95% and 5% in previous year.

• Due to Coivd-19 and increase in raw material prices, GRP Limited revenue and profit margin was impacted in FY 2021

Revenue Trend

Topline and Bottomline trend (Lakhs)

EBITDA Margin Trend (%)

ROE, ROCE, and Asset Turnover trend (%)

Shareholding Pattern (%)

Top Shareholders

Ratio Analysis