Award of Contract
Price
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National Plastic Technologies Ltd has received a Letter of Comfort from Hero Moto Corp to manufacture and supply plastic body parts (painted and unpainted). The order is valued at up to Rs. 52.50 Crores per annum for a 3-year tenure, implying a total potential value of around Rs. 157.50 Crores. The company will set up a new manufacturing unit near Sri City/Tirupathi in Andhra Pradesh within the next 6 to 8 months, with interim supplies coming from existing facilities. The order is domestic and not a related-party transaction.
This is a sizeable, multi-year order from a major two-wheeler OEM, which should provide strong revenue visibility and likely boost the company's earnings over the contract period. The capex for a new plant may temporarily pressure margins, but the long-term revenue ramp-up is positive for shareholders.