West coast paper mills ltd


(asarun) #22

Interesting. Based on this report, it appears the Indian paper industry is not that competitive against imports. To quote “As per IPMA, paper from ASEAN countries that is produced from raw wood is available at about USD 40 per tonne, as against USD 110 per tonne in India. Rising imports at predatory prices from surplus countries like China, has been a major concern for local players in India.”

So the surge in paper imports doesn’t sound like good news at all. On the other hand, it appears the China ban on waste paper imports is still in force, which is good for some Indian manufacturers.


(asarun) #23

This has run up strongly. JK Paper’s results and improved margins have no doubt helped. Seems like this margin growth may stay for a while given China restrictions on waste paper and high pulp prices are still the case.

I noticed that West Coast has paid almost no tax the past two years. They get something called “MAT Credit Entitlement” against their current income tax. What exactly is that? I don’t know much about it. Will that change?

Any thoughts?


#24

Paper stocks bump in anticipation of govt’s anti-dumping duty levy

Prices of all varieties — newsprint, writing and printing paper, packaging and speciality paper — have gone up by five to seven per cent this calendar year, primarily because of the China factor and a sudden upsurge in consumer demand,” said Saurabh Bangur, vice-chairman, West Coast Paper.

Last year, China had banned import of mixed paper waste and this had significant impact on the global market. China has substantially raised its import of pulp, leading to a spike in pulp prices. Pulp is a substitute for waste paper and its major exporters —Indonesia, Malaysia, Chile – have diverted theirs to China at a higher price.

  • See the below video to understand the china ban on mixed waste paper

The Indian paper industry is in a sweet spot, as increasing global paper prices have provided an umbrella for raising of domestic prices, even as backward integration for wood / pulp locally through farm forestry has been highly successful. With international pulp prices strong, and a more disciplined global industry, we expect the upswing to be sustainable in the medium term,” says Bhakti Thacker, an analyst with Investec Securities.


#25

Report : :page_with_curl: INVESTEC - PAPER INDUSTRY REPORT has the content related to Westcoast paper mills

West Coast Paper Mills (WCPM) is one of the top branded paper company in the country, which is benefitting from a consolidating industry in India, and overseas. WCPM has successfully delevered its balance sheet over the past few years, and we expect it to be practically debt free by FY20. The management team is one of the more experienced team in the industry, and has built a solid distribution network making it capable of quickly expanding capacity, and sales. Valuation of 7.6% FY18 FCF yield, 10x FY18E P/E (8x FY20E EPS) is supportive, even as we expect strong cash flow to sustain. However, a track record of unrelated diversification makes us somewhat cautious, and we initiate on the stock with HOLD rating.

:small_blue_diamond: WCPM is one of the top paper companies in the country by size – it operates a 320,000 integrated paper mill, with sufficient pulping capacity, and a 75 MW power plant. An optimal size of the plant, it is amongst the more profitable paper companies in India today – FY18 EBITDA margin of 21.2%, and RoIC of 14.7%. WCPM also enjoys adequate supply of water, a key ingredient in paper making, ensuring a disruption free production schedule.

:small_blue_diamond: We expect the paper cycle to remain buoyant, which should support profitability of top paper companies like WCPM. Over the past 2 years, WCPM has generated
over Rs.5,825.6 mn of free cash flow as it has taken advantage of the 2nd widest distribution network in the country as the paper cycle recovered.

:small_blue_diamond: WCPM has successfully delevered over the past 2 years, and is practically debt free today. While a solid balance sheet positions WCPM to be one of the consolidators, a bank default in one of the group companies has created a stumbling block in the NCLT process. This means that expansion by WCPM has to be organic, making its desire of expanding its manufacturing footprint more challenging than its competitors. For instance, it was ruled out of the NCLT process for Sirpur Mills, which eventually has been acquired by JKPL.

:small_blue_diamond:Like the other majors, WCPM has also sought to control its supply chain for wood fibre. However, success has been somewhat mixed, and it still imports ~43% of its requirement of wood fibre. This exposes WCPM to price volatility of fibre, which has been a key risk for the industry in the past.

Above report has well covered analysis on JK Paper, west coast paper mills and Tamil Nadu Newsprint Papers Ltd. One go through the report to get an idea on the paper industry

Disc: no holdings


(kums17) #26

(kums17) #27

Any further developments on this subject. I also hear that anti plastic drive by many states will help paper industry. Any view

Invested for Tracking


#28

Promoters group are buying in market though it is small quantity.


(GreyCells) #29

image


(Amit Mehta) #30

Q3 2019 results

  • Sales u 7% yoy
  • Operating Profit up - 56% yoy
  • Operating Margin increased from 24% to 35% yoy
  • Net profit up - 56% yoy

(Saurav Rathi) #31

Promoters are buying (albeit in small qty); results are good and the future prospects of the industry also looks good. Is there any reason behind the recent fall? Particularly today’s (around 9%)? Am I missing anything or the markets are just being irrational?