1.CPM is Central Pulp Mill ie., the name of the plant in Gujarat.
2. On capacity expansion, yes, the management talk appears contradictory. At the same time, as I have shown under the question “what is the constraint of the sector”, company mentioned that capacity increases are constrained (better word than ‘restricted’ used by management) by resource availability. It means the actual capacity might be higher than the name plate capacity. Further, since the industry is highly fragmented, there will always be smaller companies (in fact companies with more than 50k capacity are only 50 in number in a country that has a total capacity of 13million tons with 750 mills) that cannot utilise the capacity.
3. By saying that a million ton plant per annum can be absorbed by the market, the management might be implying the demand factor. At the moment, India is importing (See the industry comments)
Of course, all these are my assumptions.
4. FCCB conversion is going on, I guess. As per the AR, it will go on into 2018.
5. Capacity utilization is 103% but if I read between the lines, company is aiming to cut costs (please see the table – PBIDT of 2015-16 and 2016-17 vs Sales of the same periods). Company has gone to great lengths in the AR to tell how they are saving on transport costs, power etc., and of course, how they are changing the work culture in the organization.
Of course, I do not recommend the stock. I am only saying, the AR and the company are worth exploring.