Voith Paper Fabrics India Private Limited - Fundamental Analysis

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Voith is a Global MNC with huge projects under their supervision. They are dealing in a large way to cater business especially in Power Industry.

Voith Paper Fabrics India Ltd is in the Textiles sector, having a market capitalization of Rs. 309.23 crores. It has reported a sales of Rs. 22.38 crores and a net profit of Rs. 4.99 crores for the quarter ended March 2017. The company management includes Martin Gustav Scherrer (Chairman), Ravinder Nath (Independent Director), C S Gugliani (Company Secretary), Biren De (Independent Director), Surinder Kumar Nagpal (Independent Director) among others.

Registered Office:

Voith Paper Fabrics India Limited
Registered Office:
113/114 A, Sector 24,
Faridabad-121005
Haryana, Delhi NCR

Voith Hydro Private Limited
A-20 & 21, Sector 59
201 301 Noida

Voith Turbo Private Limited
P.O. Industrial Estate, Nacharam
500 076 Hyderabad (A.P.)

Share Holding Pattern:

Promoters: 74.04%
Public Group: 25.96%

Banks & the Other Financial Institutions: 1.19%
Non Institutions: 24.77%

Technical Profile:

Market Cap: 309.23 Cr.
Stock P/E: 17.59
Current Price: 704.40
Book Value: 405.31
Face Value: 10
52 Week High/Low: 755.40/520.00

Notes

  • Book Value (405.31) shows a great commitment.
  • This company pays the dividend ratio every year (Approx 11%). It’s a positive sign for the Investors.
  • Stock P/E (17.59) is fairly good.
  • Sells have been increased considerably in the last Year.
  • Operating Profit Margin is 31% & it’s a good revenue builder in the upcoming years.
  • Promoter’s holding is 74.04%.
  • Its 52 week high is 755 & recently its been trading at 704. So scopes for profit booking may not be neglected

Detailed Work Profile:

Paper Industry

Forming Fabric

VPFV offers to its customers, state of art forming fabrics for a wide range of paper making applications. These fabrics are woven on highly advanced looms and processed under strict quality systems to meet specific customer needs. A well trained team works closely with customers to supply them fabrics suitably selected and tailored correctly for their individual requirements. Fabrics are available in wide range of drainage, fiber support and permeability combinations

Press Fabric

VPFV design and manufacturing capabilities enable it to successfully meet any wet end application requirement of the pulp, paper and paper board industry. This product range includes full range of Wet Press Felts: single layer, double layer, laminated and Vector. All the above are specially designed and manufactured to suit individual applications

Roll Covers, QualiFlex sleeves for shoe press and Doctor Blades

They have entire range of roll covers and doctor blades for each and every position of different types of paper machines.

Dryer Fabric

VPFV design and manufactures complete range of dryer fabrics for pulp, paper and paper board industry. VPFV dryers are preferred because of:

• Ease of seaming/joining
• Fabric stability
• Drying efficiency
• Sheet runnability
• Non-marking surface
• Wear resistance
• Degradation resistance hydrolysis

Fiber Cement

This Fabric is used for making Fiber Cement sheets and pipes. Our felts are specifically designed to be utilized within fiber cement production. They provide desired stability as well as durability and ensure machine performance

Voith Paper (In Brief in simpler Language):
Voith Paper is a supplier in the international paper industry, supporting all aspects of the paper-making process from fibers to end products. Voith Paper’s product portfolio includes machines for newsprint paper, protective and specialised papers (decorative paper, thermal paper, cigarette paper, tissue paper) as well as graphic papers, sanitary papers and paperboard. Worldwide, one third of the global paper production is performed on Voith Paper production systems.

Revenues generated Globally by Voith Paper:
1.43 billion Euros

Other Activities in India by Voith Group:

Hydro Power Plants

They offer comprehensive solutions including balance of plant electrical and mechanical auxiliaries and automation systems. Their systems are designed to provide stability in the seamless operation of hydropower plants and ensure high availability.
Voith Hydro in India has a highly competent team of experts who are able to provide value added service to customers in India and abroad.

Voith has a Hydro Power Station in Omkareshwar on Narmada river & which has the capacity to generate 520 Megawatts of Power.

Voith Hydro (formerly Voith Siemens Hydro Power Generation) is a joint venture between Voith and Siemens, which is now a system supplier for hydropower stations. Currently, a third of the world’s hydroelectric power is produced with turbines and generators from Voith Hydro including major projects such as: Niagara Falls (1903), Itaipu (1976), Three Gorges Dam(2003), and Lam Takhong Dam (2016).

Divisions:
Large Scale Projects, Small Hydro, Control and Automation Technologies, Integrated Service

Revenues: Approx. 1.31 Billion Euros

Voith Turbo Solutions:

Voith Turbo specialises in mechanical, hydrodynamic, electric and electronic drive systems, as well as braking systems. Worldwide, these systems are used in industrial plants, as well as in road and rail vehicles. In the field of turbo-transmission,Voith Turbo-Transmissions is the world’s market leader. The Voith Retarder, is one of the best known hydrodynamic braking systems and is found in many utility vehicles. In addition, other Voith drive systems, such as the Voith Schneider Propeller, are used by marine vessels

Divisions:
Industrial, Road, Rail, Marine, and Trading

Revenues: 1.40 billion Euros

Voith has a global presence & exports their products to Norway, Brazil, Netherland, German Railways, Sweden, Wisconsin, Oregon, Pennsylvania, China, Scotland & many other countries.

3 Likes

Good analysis.
To reclarify, it’s the parent MNC co that Produces a third of world paper. Indian co has slow growth and is sitting on a lot of unproductive cash with no clear indication of what they’ll do with it.

IN my biased opinion, co has narrow moat good pedigree and reasonably priced when I bought it about 30% cheaper than CMP. I don’t expect any fireworks in terms of growth though.

Disc: long since a long time

1 Like

The management has decided to put the Cash Reserves to good use and has done CAPEX over the last 2 years of Rs. 40 Cr.
Since the initial CAPEX was done on Land/Building (non revenue accretive Fixed Assets) and they have now started major Plant & Machinery addition, we should start seeing the numbers coming in.
March quarter was already quite exciting.

Did anyone attend the AGM?

2 Likes

Any idea how much additional revenues they can generate from this capex?

Also with lot of capex happening in paper and packaging industry, voith seems well positioned to benefit from the same.

Just started looking into the company, the numbers look good, and price has finally caught up to the performance. But I don’t understand what their products exactly are, can anyone shed more light on this? Went through the AR but couldn’t find anything much there as well. Also what are the growth prospects and drivers for this company?

Voith paper looks very interesting, It’s a good idea to go through FY20 AGM transcript to understand the business a little better

Link: https://voith.com/ind-en/Website_AGM-2020_Transcript.pdf

I have also sent a mail to the company to upload the FY21 AGM transcript at the earliest, hopefully it will be done soon

Prepared a small thread:

2 Likes

Hi, started tracking this company. Can anybody shed light on whether the upcoming plastic straw ban to paper will benefit this company? Thanks

Hi. It makes no difference. You can read my post to understand what the company does better.