10000 to 4crs in 18 months 1000rs to 50crs 300% returns 75% promoter holdings A 50 bagger A sureshot 5 bagger Analysis Another fraud? Auto ancillaries Bank sector Blind sell Brand plays Broking Bse Nse Buy calls cements Ceramics/tiles Counters I don't like Debt free businesses Delisting candidates demerger bets Disclosure- I own them Domestic consumption plays E-Commerce pick Education Exit at rallies Famous analysts Famous stocks FMCG Footwear future multibaggers Gems andJewellery Hidden gems High conviction ideas High dividend plays High potential small caps High ROE stocks Holding companies Hotel sector How they looted you.. Indian stock market Infrastructure sector Interesting Microcaps IT KPO Landbank plays largecap ideas Less than 5 PE stocks Liquor Logistics Market lessons Market outlook for 2013 and 2014 Market underperformers Meeting with the CEO Metals Monopoly businesses My 5 baggers My Favourite counters My paid stock recommendations My stock picking techniques nse bse tips Oil exploration Operator calls Paints Penny stock outlook penny stock updates Pharma sector Poultry stocks PSU Publicity freaks Real estate Renewable energy plays Safe bets Sell recommendations Share market Live shipping stocks short term call SOTP plays stock tips stock under 10rs Stocks to watch out for Strong bonus candidates Takeover candidates TATA product tea Textiles The 13 bagger The 45 bagger Trading companies Transformers Turnaround bets Tyres Uncertain/Risky business models Unique businesses

Search This Blog(Over 800 companies covered in the blog).

Archives : Old artciles

Thursday, July 16, 2009

Andhra Pradesh Paper Mills Ltd:-Future growth prospects and outlook

Scripscan:Andhra Pradesh Paper Mills Ltd

Story:Hyderabad-based Andhra Pradesh Paper Mills Limited (APPM) is a part of the Kolkata-based LN Bangur group. Few institutional investors buy the so-called commodity stocks like paper because they think competition in the segment is too intense. It’s a false belief. Paper companies are doing very well. And they are cheap. APPM is currently trading at Rs66, at which price its market-cap is just 0.2 times its five-quarter sales (annualised) and 1.7 times its annualised operating profits. While turnover has come down over the past four quarters, operating profit at Rs44.03 crore for the March 2009 quarter was the highest over the past four quarters. Over the past five quarters, its sales have grown an average 12% and its operating profits have rocketed an average 63% over the same period. Its operating margin averaged a healthy 18% over the past five quarters. If paper is seen as a low-margin business, it is not correct. The business is capital-intensive. The return on equity (RoE) of APPM is 5%. But this is relevant only if you want to bet on the stock for the very long term. Even then, high RoE does not lead to higher stock prices. A good example is Hindustan Unilever. What is relevant is whether the stock is cheap relative to its growth potential. APPM is. APPM was set up in 1964; in 2001, it took over the control of Rajahmundry-based Coastal Papers Limited. The production of both the units put together is 181,000 tonnes per annum (TPA). The diversity and the range of its products meets the need of Modi Xerox, Indo National and leading publication houses like Macmillan and Navneet Publications. In October 2008, when the world was plunged in depression, the company had chalked out an expansion project of Rs291 crore to add 70,000tpa capacity. This is expected to be completed by March 2010. Of the Rs291 crore capital outlay, around Rs50 crore would go in for cold-fired boiler that would generate nearly 15MW of power, of which 5MW would be sold to Reliance Power. The company has obtained a loan of $40 million for the expansion from the International Finance Corporation (IFCW), which will also hold around 9% equity. Paper consumption is directly proportional to economic growth. At a demand growth of 8% pa, India is one of the fastest growing markets for paper, globally.A great paper stock to buy at dips.

Important Disclaimer&Privacy policy

This blog does not share personal information with third parties nor do we store any information about your visit to this blog other than to analyze and optimize your content and reading experience through the use of cookies.You can turn off the use of cookies at anytime by changing your specific browser settings.This privacy policy is subject to change without notice and was last updated on 20.3.2013. If you have any questions, feel free to contact me directly here: Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.

Subscription to Arunthestocksguru

Enter your email address:

Delivered by FeedBurner