About L K Mehta Polymers Limited

Business Overview

L.K. Mehta Polymers Limited is actively engaged in the trading and manufacturing of a comprehensive range of plastic products, catering to the diverse needs of customers. The product portfolio includes a wide variety of ropes and twines, such as monofilament ropes, danline ropes, tape ropes, baler twines, and packaging twine (sutli). Additionally, the company is involved in the trading and reprocessing of raw materials, including polypropylene granules and polyethylene granules, serving various industries.

A significant milestone was achieved in 2002 with the expansion of operations through the establishment of a new production unit, which commenced operations in 2004. This unit specialized in woven sack bags and pipes, marking a strategic move to diversify the product range and strengthen its industry presence. Despite facing challenges in securing a high-power electricity supply, the company successfully operated the unit until 2022, when it was subsequently transferred.

The company continues to emphasize innovation and excellence, navigating industry challenges while maintaining a steady growth trajectory. Products are marketed under the brand name “Super Pack”, which has become synonymous with superior quality and reliability. The establishment of this brand reinforced L.K. Mehta Polymers Limited as a distinguished player in the market, setting it apart from competitors. With extensive experience and adherence to high standards, the company meets major industry specifications and customer requirements.

The Company has total 21 employees as at January 25th, 2025, with an increase in the operation capacities or execution of any expansion projects in future, they expect increase in such number of employees and labours. The Banker to the Company is Central Bank of India.

Industry Analysis

India’s Rope Market (2024-2030) Outlook
India Rope Market registered a growth of 0.24% in value shipments in 2022 as compared to 2021 and an increase of 10.51% CAGR in 2022 over a period of 2017. In Rope Market India is becoming less competitive as HHI index in 2022 was 1566 while in 2017 it was 1122. Herfindahl Index measures the competitiveness of exporting countries. The range lies from 0 to 10000, where a lower index number represents a larger number of players or exporting countries in the market while a large index number means less numbers of players or countries exporting in the market. India has reportedly relied more on domestic production to meet its growing demand in Rope Market.

India Rope market currently, in 2023, has witnessed an HHI of 1628, which has decreased substantially as compared to the HHI of 2919 in 2017. The market is moving towards moderately competitive. Herfindahl index measures the competitiveness of exporting countries. The range lies from 0 to 10000, where a lower index number represents a larger number of players or exporting countries in the market while a large index number means fewer numbers of players or countries exporting in the market.

Business Strengths

1. Experienced Promoters:
The promoters of L.K. Mehta Polymers Limited possess extensive knowledge of various products and technologies within the plastic industry. Their over three decades of experience in the manufacturing and trading segments have played a pivotal role in the company’s consistent growth. Their deep understanding of the business enables the company to capitalize on market opportunities effectively.

2. Generational Management:
With a rich heritage and deep-rooted tradition of entrepreneurship, the company has successfully navigated industry challenges across three generations. This multi-generational involvement reflects a commitment to the company's core values, long-term vision, and sustainability. The experience, knowledge, and expertise passed down over time have significantly contributed to its continued success and adaptability in the market.

3. Commitment to Quality Service:
Stringent systems are in place to ensure timely product delivery with minimal errors. High product quality has contributed to customer goodwill, retention, and repeated orders. A well-structured internal process ensures that client orders are meticulously checked at each stage, from order placement to final delivery. Maintaining consistent service quality has played a crucial role in building long-term customer loyalty.

4. High Level of Customer Satisfaction:
Customers express high satisfaction with the company's services, including order placement, product quality, timely deliveries, and an effective complaint redressal mechanism. The ease of placing orders and a strong customer service approach have been instrumental in expanding the customer base and enhancing overall market reputation.

5. Strong Client Relationships:
Existing long-term client relationships drive repeat business and customer retention. A strong customer network provides a competitive edge in acquiring new clients while strengthening relationships with existing ones. The ability to secure multiple repeat orders highlights the company’s commitment to customer trust and service excellence.

Business Strategies

1. Emphasis on Quality Standard Products:
Product quality remains a top priority from both a customer satisfaction and business growth perspective. The company focuses on offering products that comply with requisite quality standards and regulatory norms. Delivering high-quality products enhances the company's market reputation and strengthens long-term customer relationships.

2. Strong Relationships with Suppliers, Customers, and Employees:
Maintaining cordial relationships with suppliers, customers, and employees is a key factor in sustaining business growth. A dedicated and focused approach, coupled with efficient and timely product delivery, has helped build strong, long-term relationships over the years. Repeated orders from both customers and suppliers reflect the trust and reliability established in business operations. Since most clients and suppliers are local, personal attention and direct communication further strengthen mutually beneficial relationships and enhance overall performance and collaboration.

3. Diversification and Expansion of Geographical Reach:
Currently operating in the domestic market, the company aims to expand its business globally to drive revenue growth. The business strategy focuses on ethical integrity and prudent operational decisions, positioning the company advantageously within the industry. Expanding into new geographical markets will create additional opportunities and strengthen its competitive position

Business Risk Factors and Concerns

1. Geographical Concentration Risk:
The company’s domestic sales are heavily dependent on five key states: Madhya Pradesh, Uttar Pradesh, Bihar, Assam, and Rajasthan. A significant portion of revenue—92.89% (as of December 31, 2024, and March 31, 2024), 95.55% (FY 2023), and 96.79% (FY 2022)—is generated from these regions. Any disruption in sales within these states could substantially impact overall revenue and business operations.

2. Revenue Dependency on Gold and Related Products:
A portion of the company’s operational revenue is derived from the sale of gold and related products. This segment contributed 17.70% (as of December 31, 2024), 21.24% (FY 2024), 35.61% (FY 2023), and 29.59% (FY 2022) of total revenue. Fluctuations in demand, market volatility, or regulatory changes in this sector could impact overall financial performance.

3. Dependence on Debt and Financial Liquidity Constraints:
The manufacturing operations require substantial working capital, which is met through internal accruals, creditors, and borrowed funds. Expansion in operations and production may necessitate additional borrowing, leading to a higher financial burden. Increased debt obligations may result in cash flow constraints, limiting the availability of funds for capital expenditures and corporate initiatives. Additionally, a high debt level places the company at a competitive disadvantage compared to financially stronger competitors. The ability to generate sufficient cash flow or secure refinancing options remains a critical risk factor.

L.K. Mehta Polymers Limited faces key business risks, including geographical concentration, with over 92% of revenue dependent on five states. Additionally, a significant portion of revenue comes from the sale of gold and related products, making the company susceptible to market fluctuations. The reliance on debt for working capital poses financial risks, potentially impacting profitability and operational flexibility. These factors highlight the importance of diversification and financial management to sustain long-term growth.