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Archives : Old artciles

Monday, April 21, 2014

Orient paper Ltd:-The cheapest bet with massive potential in the consumer appliances segment

Another paid call given just couple of months ago.Already up 20% from the suggested level.Now open readers act on it for further 40% movement in the short term.

Stock Idea:-

Scripscan:Orient paper Ltd
Traded in:Nse-bse
CMP:14
Target:23
Return percentage:65%
Duration:4-6 months
Point to note:Please don't make any haste.Its a volatile counter with good volumes and would always offer chances to pick up during correction periods.

Quote:A lot of action is expected to happen in the recommended counter.The note is of Skp aligned with my views.Its not meant for long term members.Folks who fancies short term stuff can act accordingly.

Company Background:Orient Paper & Industries Ltd (OPIL) is a part of CK Birla Group. It is engaged in the business of manufacture of Paper (tissue papers, writing and printing papers, photocopy papers etc) and Consumer Electrical goods (fans, lightings and household electrical appliances). OPIL has five manufacturing units located at Amlai (M.P.), Brajrajnagar (Orissa),
Kolkata (W.B.), Faridabad (Haryana) and Noida (U.P.)

Investment Rationale:OPIL Paper business in recent years have been facing stiff challenges, since Indian Paper Industry has been passing through a very difficult phase due to huge cost increases and depressed market conditions. In addition, the OPIL had problems in functioning of its aging captive power plant, which led to losses during the year FY13. OPIL has already taken several initiatives to improve the performance of paper business:

a)A 55 MW power plant was commissioned in December -2012 at Amlai, M.P. This will not only overcome the bottleneck of steam and power unavailability but will also result in savings of ~INR 300 million annually.

b)New 250 million gallon water reservoirs are now fully operational,which is helping OPIL to avoid any water shortage related shutdown.

c)OPIL has taken ~12% increase in the prices of paper which has helped in reducing losses.Apart from the above Rupee depreciation had increased the cost of imports thereby, giving some respite to the industry.

Diversification into the small electrical appliances to propel growth:OPIL has launched a wide range of Electrical/Household Electrical Appliances (achieved turnover of ~INR 500 million in the first year of launch). Initially the company will trade in the aforesaid new products and will leverage its Orient brand coupled with its robust distribution network comprising of ~5,000 dealers.

Surplus land to add value:OPIL Paper plant at Brajrajnagar is non-operational since 1999. The company has applied for coal linkage for an IPP project and is awaiting an approval. Though, we believe that relevant available land can be optimally used for other purposes going forward.

Valuation:We rate a BUY rating on OPIL with a price target of INR 23.7/share. Our target price is based on SOTP valuation methodology, discounting Electrical and Paper business at 0.2x and 1x FY15EEV/Sales.

Btw:The past data of OPIL is not comparable since the Cement division has been demerged with effect from 1St April 2012. Post the demerger, the OPIL business reflects the value of the Paper, Consumer Durable business and Investments.

My view:Orient paper after the demerger has rejuvenated itself with its initiatives.The company is all set to make a sparkling turnaround in the coming quarters.Its a class company coming from a quality stable.Interest is very high in the counter because of the intrinsic value.A lot of MF's are already behind it and with the expected profits,it should attract a premium valuation.My target is 23 bucks which should get achieved over the next 4-6 months.


People looking for midcap/smallcap positional call professional service may rush a mail at my mail id arunsharemarket@gmail.com to know more about it.

62 comments:

Anonymous said...

sir can i enter westlife dev.cmp-380

Anonymous said...

Sir pls advice on omaxe

Anonymous said...

Dear arun sir your view on India bull power

Anonymous said...

Sir please your view on India bull power

Anonymous said...

Hi Arunji,

Your views on Era Infra Engineering?. Any updates on its order book and road project revenues?.Can it be a multibagger?

Anonymous said...

Hey Arun,

What's your take on Prime Focus?

Thanks & Regards.

Anonymous said...

sir ur expert view on marksan pharma ;trasport corp of india(tci);ATFL@cmp

Anonymous said...

Hi Arun, would you prefer Mafatlal Ind. at cmp 120?

Anonymous said...

Hi arun,pls advise can I buy jk tyre at current levels and if yes pls suggest the target. Thanks shailesh

Riyaz Mohammed said...

sir , wat is ur opinion on pilani investments

Anonymous said...

hi arun

what are ur views on Majestic Auto and Pricol for long term hold

regards

Arun Mukherjee said...

1)Ya can buy westlife for a 3 year period.Good cashflow generating business.

2)Buy godrej properties instead of omaxe or any other realty counter.

3)Very bullish on Indiabulls power.Company can be a 3-4 bagger in next 2-3 years.

4)Dont like era infra,results to be pathetic for next 2-3 quarters.

5)Agro tch foods and tci are great bets.Safe compounders.No views on marksans at this prices.

6)Mafatlal needs to make more noises to be fancied by investors fraternity.

7)Dont like tyres.But always be with the leaders.

8)Pilani's NAV to mcap gap may narrow down as its holding companies get expensive in the bourses.

9)Dont follow majestic but bullish on premier instruments.

Anonymous said...

Hi arun

whats your long term view on indraprastha medical corporation

regards

Anonymous said...

Hi arun

can one purchase orient papers for long term hold in SIP mode

regards

Anonymous said...

sir wts about epc irigation..a mahindra group company....can it be an multibeggar

Anonymous said...

Hi arun

is rei agro a good buy at current price or is there any risk in purchasing as there is speculation going on regarding some insider traiding

regards

regards

Anonymous said...

Hi Arun,

What's your view on Ashapura Minechem?

Thanks.

Anonymous said...

Would you prefer Mangalam cement considering rerating in the sector?

Anonymous said...

hi arun

what are ur views n Grauer and Weil (India)

regards

Anonymous said...

Arun ji pls give insight on tree house education and vip industries. Can I buy for a long term any target

Mayur0885 said...

Hi arun sir, what is ur view on vls finance? I heard abt court hearing case is near.. Your expert comments please..

rahul said...

What's your view on west coast paper , supreme petro and tide water oil for medium to long term

avinash kuwar said...

Sir wats your view on nitco tiles and asian granito

avinash kuwar said...

Sir wats your view on nitco tiles and asian granito

Navjot Pal Singh said...

Hi sir,I just visited ur blog recently and u r doing great job in guiding retail investors.really appreciate ur effort.sir wats ur view on Jain irrigation and ccl

Anonymous said...

sir wts ur view on kriti industry

Anonymous said...

Hi Arun,
What is your view on "ASTEC LIFESCIENCES LIMITED", I am holding this from long time...

Arun Mukherjee said...

1)Very positive on Indra medical.Great defensive stock to be in for the longer term.

2)Ya can buy orient paper at dips in SIP for the longer term.

3)Very positive on EPC being the mahindra counter.A winner all the way.

4)REI agro has lost its old midas touch.It was one heck of a scrip earlier.Management needs to awake up and provide something which soothes the nerves of the shareholders.

5)Ashapura is a good stock but sector is hard to understand with lot of uncertainity.In its good days stock can be a potential multibagger.

6)Mnagalam is good but I prefer orient cement to it.

7)Grauer is a great company on rental play managed by not so great unethical people.Till they feel its time to reward the minority shareholders,stock wont perform much.

8)Very positive on treehouse and VIP.

9)VLS has been a disaster since its high profile IPO days.Hope something positive comes out.

10)Paper business never actually performed but west coast is a great company.If paper sector starts to perform,company will be a multibagger.Supreme petro is a good one too.Very bullish on tide water oil and its product Veedol.

11)Promoter issue with nitco.Dont follow asian granito.

12)Positive on jain irrigation and ccl products.

13)Dont follow kriti or astec.

rahul said...

Bought RSWM and it has recommended 125% dividend .. Should I add it if declines to 140??

rahul said...

What's your view on century enka .. Available at 0.50 times book value and consistent dividend ??

Anonymous said...

hi sir,

whats ur view about the potential of marksans pharma.

regards

avinash kuwar said...

Sir target of hydrabad industry orient green power jai balaji jhs and reliance capital for 5 yrs

avinash kuwar said...

Sir psl?

Ramesh Raju said...

Sir
Your view on gulshan poly and fsl and trident

Anonymous said...

Are you still bullish on Godrej Insustries after recent run up..any target in mind? is it long bet?

Anonymous said...

Hi Arun,

Could you please let me know your view on Aurionpro and Paushak. Aurionpro seems a niche play. How do see this company unfolding over the next 2-3 yrs. Please advice.

Thanks,
Rakesh

Sanjay Darkonde said...

sir DHPind is now hold orcan buy@cmp63

Sanjay Darkonde said...

sir DHPind is now hold orcan buy@cmp63

Anonymous said...

cheviot meeting for dividend and result is on 9th may 2014.Do you think that we have still chance to buy at 308..?
we want to buy tomorrow at 310.

Anonymous said...

Do you think acrysil has got potential to scale up ? Can we buy at cmp or do we need to wait for correction and consolidation to get into this.

Arun Mukherjee said...

1)RSWM is a good dividend play.Nothing else till textile mills get fancied.

2)Century enka a deep value buy.Buy when there is a trigger,else may continue to bore.

3)Why to bother about targets?Stay put till the growth story is intact.

4)Marksans has very good potential.Missed it at 3,5 and 12.

5)Dont follow other two but bullish on gulshan.

6)Very positive on the entire godrej pack.Own godrej prop in personal capacity.

7)Dont follow aurion,paushak has massive potential.

8)Cheviot a sound value pick with lot of cash in book.

9)Dhp was a great buy when i covered it at 30 odd.

10)Ya acrysil can scale up.

Anonymous said...

What about Repco Home Finance, Kaveri Seeds, Mayur Uniquoters and Astral Poly Tech.. !!

Anonymous said...

Can you please advice on a portfolio of 10 stocks for next 2-3 years?

Anonymous said...

can you please let us know your view on "Munjal Auto Industries Ltd"

Anonymous said...

Should it be good to buy following stocks at CMP?
1. Cairn India Ltd.
2. Oriental Carbon & Chemicals Ltd.

Anonymous said...

Hi arun,thanks a lot for your replies, can u please provide your views on these 2 companies an their targets for next 5 years. 1 mother son semi, 2. Godrej properties. Thanks shailesh

Anonymous said...

Need your honest views on these 2 counters @cmp
1. Plastiblends @112
2. Manjushree Technopack@202

ameesh moody said...

Hi Arun I am lately following your recomended stocks. What is your view on Rain Industries. Awaiting your reply.

Anonymous said...

Requesting you to give your views on singer india.

Anonymous said...

Dear sir,

What is ur view on eon electronic,jsw energy,narmada gelatine, ion exchange,GPPL, For long term investor.

If positive kindly let me the intrinsic values for all the above mentioned stocks.

Regards,
Tumi

Anonymous said...

Hi Arun,

Do you track Asian Electronics these days? Can it be a potential turnaround multibagger story in future?

Mads said...

Arun,

Need your comments on INIFINITE computers .. Believe it can deliver 100% appreciation in FY 15 as their EBITDA margins will be back to normal after a subdued year in bottom line due to their one time investment for future growth.

Arun Mukherjee said...

1)Been bullish on repco,kaveri,astral,mayur for 3 years now.All delivered multi times return.All got a large base now,they will be 15-20% yearly compounders for few more years.

2)In the front page itself you can find 20 stock ideas.

3)Bullish on munjal auto.On good ancillary days,it will run.

4)Move from cairn to selan.Oriental carbon,though a commodotised biz but got a great business model in place.

5)Been bullish on manjushree since 90 levels.Was recommended to paid members too.Plastiblends can be a winner in the new bull run.Market cant ignore this leader.

6)Dont follow rain ind.

7)Bullish on Singer India.If parent starts to outsource,can be a huge mover.

8)Bullish on gppl,ion and narmada.

9)Used to follow asian during its 2005-06 days.Squandered everything.Was a great story.Dont follow since.

10)Always liked infinte comp but markets never gave it proper valuations.Keeping a close eye on it.A good dividend play too.

Anonymous said...

Dear arun, what is the returns you have provided for your PMS member last year. I am getting mixed feedback from some in deep loss only invested in yourure scrips and someone has hailed you lot of decent returns. Just curious before I step in tour PMS

Anonymous said...

Dear ArUN,

Request if you could share ur view on Astra Microwave Limited.
thanks

Anonymous said...

Hello Arun,

How's Asian Oilfield Services? Can it turn out to be a Alphageo like story?

Thanks.

Anonymous said...

WHAT ABOUT GRAUER AND WEIL
EPS:1.36 FACE VALUE 1.00
NET PROFITT RS:30.00 CRORES SALES MORE THAN 385.00 CRORES FOR THE YEAR
2014. SHARE PRICE IS STILL 8.59
KINDLY COMMENT.

Anonymous said...

WHAT ABOUT GRAUER AND WEIL
EPS:1.36 FACE VALUE 1.00
NET PROFITT RS:30.00 CRORES SALES MORE THAN 385.00 CRORES FOR THE YEAR
2014. SHARE PRICE IS STILL 8.59
KINDLY COMMENT.

Anonymous said...

WHAT ABOUT GRAUER AND WEIL
EPS:1.36 FACE VALUE 1.00
NET PROFITT RS:30.00 CRORES SALES MORE THAN 385.00 CRORES FOR THE YEAR
2014. SHARE PRICE IS STILL 8.59
KINDLY COMMENT.

Anonymous said...

WHAT ABOUT GRAUER AND WEIL
EPS:1.36 FACE VALUE 1.00
NET PROFITT RS:30.00 CRORES SALES MORE THAN 385.00 CRORES FOR THE YEAR
2014. SHARE PRICE IS STILL 8.59
KINDLY COMMENT.

Epic Research said...

BUY DOLPHIN OFFSHORE ABOVE 109 TG 110, 111.50, 113 SL 107.45

anil said...

Hi arun i am intrested in buying shares fro gmr infra, morpean labs, surya pharma, tanla soultions, suggest we can i invest on these stocks
sugeest m low share price future multibaggers

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