Pretty decent set of numbers by SPBL and better than my estimates for Q4 20:
Q4 results_mar_20.pdf (3.4 MB)
Some highlights:
- Debt reduction continued - 85 Cr ‘decrease of non-current borrowing’. This should extinguish all outstanding debt. Need to await AR 20 to validate.
- Dividend increased to 25Cr (from 22 Cr in FY19) - shows healthy liquidity despite debt reduction and higher CAPEX charge (46 Cr vs 30 Cr)
- 60 laks inter-corporate short term loan has been repaid and collected from related party
- Overall Cash + Cash Eq. + Bank deposit increased to 325Cr from 310Cr. This provides company with a substantial war chest and can allow for acquisition of distressed assets should smaller paper mills become unviable due to current economic situation.
Also enclosed COVID Impact notified to exchanges. Commentary is cautious (as always 
) but good to note Tirunelveli unit also opened on Apr 27. The bigger unit at Erode has been up since Apr 13 (after closure on Mar 24) and is working at scale without issues.
On the flip side, their ‘zero stock’ for 21 years record is probably broken as inventory is building up due to subdued sales in metro hot spots
COVID impact_BSE.PDF (1.9 MB)
On the valuation front, my estimate of fair value has increased from 250 to 264. Meanwhile stock gained about 10% since my post on Apr 13.
Looking fwd to AR 20!