Hi,
Most of the companies operating in various segments of paper industry presently trading at around 10 PE or less (International paper ltd at 15PE). I am not sure how market is going to value this cyclical sector if they continue to show consistent earning growth for next 1-2years. Ruchira,International paper,SIPL,Seshasayee,NR Agarwal have posted good Q2 nos.Results of JK/west coast are still to be announced. I am optimistic that for next two years these companies will continue to post better results unless China changes its policy or when excess capacity comes online.
SIPL is currently trading at around Rs.100 with EPS of Rs.12-13 for FY19 with near complete utilisation of capacity.SIPL topline may not grow much for next FY unless they run extra shift to increase the production but seems like they will take price hikes.
There may be better methods to valuate which I am not aware.Hope seniors in the forum will answer it better.
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