(1/18)
About:
West Coast Paper Mills Ltd. is the flagship entity of the SK Bangur Group, based out of Kolkata.
It manufactures writing,printing papers & other products. WCPL sells its products across India through its dealership network.
About:
West Coast Paper Mills Ltd. is the flagship entity of the SK Bangur Group, based out of Kolkata.
It manufactures writing,printing papers & other products. WCPL sells its products across India through its dealership network.
(2/18)
Capacity:
WCPL has a 2.64-lakh MTPA, pulp production capacity & 75-MW captive power generation capacity.
It has a 3.2-lakh MTPA paper manufacturing plant in Karnataka.
It acquired majority stake in APL in FY2020 which has manufacturing capacity of 2.41-lakh MPTA.
Capacity:
WCPL has a 2.64-lakh MTPA, pulp production capacity & 75-MW captive power generation capacity.
It has a 3.2-lakh MTPA paper manufacturing plant in Karnataka.
It acquired majority stake in APL in FY2020 which has manufacturing capacity of 2.41-lakh MPTA.
(3/18)
Global Paper Industry:
The global pulp & paper market are projected to grow from $351bn in 2021 to $370bn in 2028 at 0.74% CAGR. The World’s largest paper producing country: China, USA & Japan, account for over 50% of the world’s total paper production.
Global Paper Industry:
The global pulp & paper market are projected to grow from $351bn in 2021 to $370bn in 2028 at 0.74% CAGR. The World’s largest paper producing country: China, USA & Japan, account for over 50% of the world’s total paper production.
(4/18)
Indian Paper Industry:
Paper consumption in India is apx 22.05 MT & expected to reach 23.5 MT by 2025
Paper industry in India is
expected to derive an annual average growth rate of 8-9% over the next 5 years led by a robust
growth in packaging grade
Indian Paper Industry:
Paper consumption in India is apx 22.05 MT & expected to reach 23.5 MT by 2025
Paper industry in India is
expected to derive an annual average growth rate of 8-9% over the next 5 years led by a robust
growth in packaging grade
(5/18)
Characteristics of the Indian Paper Industry:
1. It’s one of the core industry, a fuel for economic growth
2. Highly cyclical in nature
3. We can find a wide variety of raw materials that the mills use for production
4. We expect some consolidation in the industry
Characteristics of the Indian Paper Industry:
1. It’s one of the core industry, a fuel for economic growth
2. Highly cyclical in nature
3. We can find a wide variety of raw materials that the mills use for production
4. We expect some consolidation in the industry
(6/18)
Categories of Paper & there share in India
1. Writing & Printing - 25%
2. Packaging Grade - 55%
3. Newsprint Paper - 10%
4. Specialty Paper - 10%
Categories of Paper & there share in India
1. Writing & Printing - 25%
2. Packaging Grade - 55%
3. Newsprint Paper - 10%
4. Specialty Paper - 10%
(7/18)
Focus of WCPL:
The focus is on developing new product range, enter new market thus reducing its dependency
from any single product segment or a single geography. The major focus will be on uninterrupted operation of the existing capacities albeit any geo-political issues
Focus of WCPL:
The focus is on developing new product range, enter new market thus reducing its dependency
from any single product segment or a single geography. The major focus will be on uninterrupted operation of the existing capacities albeit any geo-political issues
(8/18)
Key Strengths:
• Strong market position in the domestic PWP industry –
Due to its long presence, dealer network across the country and manufacturing capabilities producing wide variety of products to cater to different sectors.
Key Strengths:
• Strong market position in the domestic PWP industry –
Due to its long presence, dealer network across the country and manufacturing capabilities producing wide variety of products to cater to different sectors.
(9/18)
• Lower per-capita domestic consumption than global standards :
India’s paper industry growth can be very strong going forward, owing to the fact that our consumption currently is very less. And usage for packaging products is increasing fast. This bodes well for WCPL
• Lower per-capita domestic consumption than global standards :
India’s paper industry growth can be very strong going forward, owing to the fact that our consumption currently is very less. And usage for packaging products is increasing fast. This bodes well for WCPL
(10/18)
• Backward Integration:
WCPL has an adequate in-house manufacturing capacity for pulp and captive power plants.
The company generates energy from waste, which in turn helps them to reduce energy cost and improve its margin profile.
• Backward Integration:
WCPL has an adequate in-house manufacturing capacity for pulp and captive power plants.
The company generates energy from waste, which in turn helps them to reduce energy cost and improve its margin profile.
(11/18)
Surge in Demand:
The demand for PWP has witnessed a surge supported by the opening up and normalisation of operations in schools, colleges and others after the pandemic.
What’s encouraging is the improvement in OPM along with the rise in Revenue. (30% in Q2 vs 16% YoY)
Surge in Demand:
The demand for PWP has witnessed a surge supported by the opening up and normalisation of operations in schools, colleges and others after the pandemic.
What’s encouraging is the improvement in OPM along with the rise in Revenue. (30% in Q2 vs 16% YoY)
(12/18)
Risks:
Cash flows cyclicality:
WCPL’s cash flows are exposed to the cyclicality in the paper
industry. Which in turn is dependent on the overall economic activity of the country.
Risks:
Cash flows cyclicality:
WCPL’s cash flows are exposed to the cyclicality in the paper
industry. Which in turn is dependent on the overall economic activity of the country.
(13/18)
Price follows International Market:
WCPL is not a price taker, as owing to its small size, the indian paper market follows the pricing that’s going in the International market.
Price follows International Market:
WCPL is not a price taker, as owing to its small size, the indian paper market follows the pricing that’s going in the International market.
(14/18)
Liquidity:
We look into three factors to check the liquidity:
1. CFO: The company always had a strong/healthy Cash flow from Operations. It’s Net Cash Inflow from Operating activities improved from ₹216cr in Q2FY22 to ₹564cr In Q2FY23
Liquidity:
We look into three factors to check the liquidity:
1. CFO: The company always had a strong/healthy Cash flow from Operations. It’s Net Cash Inflow from Operating activities improved from ₹216cr in Q2FY22 to ₹564cr In Q2FY23
(15/18)
2. Cash and Cash Equivalents:
The company has a moderate Cash and cash equivalents
3. Working Cap Utilisation:
The utilisation level stands at 18% for the past 12months ending october 31, 22.
2. Cash and Cash Equivalents:
The company has a moderate Cash and cash equivalents
3. Working Cap Utilisation:
The utilisation level stands at 18% for the past 12months ending october 31, 22.
(16/18)
Q2 Performance:
• Revenue: ₹1210cr vs ₹900cr YoY and ₹1114cr QoQ
• Operating Profit: ₹367cr vs ₹142cr YoY & ₹321 cr QoQ
• OPM%: 30% vs 16% YoY & 29% QoQ
• EPS: ₹32.50 vs ₹10.97 YoY & ₹28.06 QoQ
Q2 Performance:
• Revenue: ₹1210cr vs ₹900cr YoY and ₹1114cr QoQ
• Operating Profit: ₹367cr vs ₹142cr YoY & ₹321 cr QoQ
• OPM%: 30% vs 16% YoY & 29% QoQ
• EPS: ₹32.50 vs ₹10.97 YoY & ₹28.06 QoQ
(17/18)
Key Ratios & Numbers:
• Market Cap: ₹4,214cr
• Stock P/E: 6.98, Ind P/E: 16.9
• RoCE: 22.9%
• RoE: 20.2%
• P/S: 0.99
• D/E: 0.16, debt stable since 3 years
• NPM Last year: 10.3%
• Sales Growth: 19.5%, 3 year CAGR
Key Ratios & Numbers:
• Market Cap: ₹4,214cr
• Stock P/E: 6.98, Ind P/E: 16.9
• RoCE: 22.9%
• RoE: 20.2%
• P/S: 0.99
• D/E: 0.16, debt stable since 3 years
• NPM Last year: 10.3%
• Sales Growth: 19.5%, 3 year CAGR
(18/18)
Which stock are you keeping an eye on in this sector?
@caniravkaria @kuttrapali26 @chartmojo
Which stock are you keeping an eye on in this sector?
@caniravkaria @kuttrapali26 @chartmojo
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