Linc Pen writes new highs

Linc Pen Plastics has been writing a new high consistently since the time it announced its Q2FY15 numbers on 17th, where it breached the upper circuit at Rs.149.25. On 18th, it hit a new high at Rs.178.35 and today, it opened at a new high of Rs.196.30.

The stock has been on a roll ever since it published its Q2 performance. The company posted a 28% (YoY) rise in net profit on a meagre 2% jump in net sales at Rs.82 crore. What really helped boost the bottomline was the tight leash on costs; its cost rationalization measures seem to be paying off as they rose only 3%.  It moderated working capital cycle (inventory and debtors) by nine days to 121 days which led to a corresponding reduction in finance cost, down 21%.

The market is probably enthused by the fact that softening crude oil prices could benefit the company as one third of its raw materials used are crude based.