Paper companies in India

There are many listed paper companies, because of low entry barriers. Most are small companies worth less than a hundred crores. In this industry, 5-10% NPMs are very good. TNPL is one compay which has very good margins (10-12%). South India paper mills Ltd as well has consistent NPMs at 7-10%. Please find data as of March 9^th. 

company	BSE CODE	nse code	marketcap
Ballarpur Industries Ltd.	500102	BILT	1992.72
Tamil Nadu Newsprint And Papers Ltd.	531426	TNPL	863.27
Andhra Pradesh Paper Mills Ltd.	502330	APPAPER	632.82
West Coast Paper Mills Ltd.	500444	WESTCOASTP	488.75
J K Paper Ltd.	532162	JKPPRQ	360.04
Emami Paper Mills Ltd.	533208	EMAMIPAP	289.19
Seshasayee Paper & Boards Ltd.	502450	SESHAPPR	242.95
N R Agarwal Industries Ltd.	516082	NRAGRINDQ	91.89
Sirpur Paper Mills Ltd.	502455	SIRPUR	83.95
Pudumjee Pulp & Paper Mills Ltd.	500343	PDUMJEPU	76.88
Well Pack Papers & Containers Ltd.	531249		64.38
South India Paper Mills Ltd.	516108	STHINPA	63
Sree Sakthi Paper Mills Ltd.	532701	SREESAKHTI	43.87
Star Paper Mills Ltd.	516022	STARPPR	33.93
ABC Paper Ltd.	532937	ABCPAPER	33.15
Pudumjee Industries Ltd.	516092	PUDMJEIND	32.4
Magnum Ventures Ltd.	532896	MAGNUMV	23.88
Malu Paper Mills Ltd.	532728	MALUPAPER	20.55
Kay Power And Paper Ltd.	530255	KAYPULP	15.71
Shree Bhawani Paper Mills Ltd.	502563	SHBHAWPA	14.1
Rama Pulp & Papers Ltd.	502587		12.19
Citadel Realty & Developers Ltd.	502445		12.01
Speciality Papers Ltd.	502465	SPECIAPP	7.22
Chhattisgarh Industries Ltd.	530495	CHHATTIND	5.39
Nath Pulp & Paper Mills Ltd.	502407		4
Victory Paper & Boards (India) Ltd.	531234		3.92
Simplex Papers Ltd.	533019	SIMPLXPAP	2.83
Sarda Papers Ltd.	516032	SARDAPPR	1.71
Pitambar Coated Papers Ltd.	530785	PITAMBER	0
Global Boards Ltd.	500159	GLOBALBO	0

 AP paper, South India paper and Rama pulp and paper have a good balance sheet. AP paper, JK paper, Seshasayee, Pitambar make huge interest payments compared their profits.

A look at the companies on their balance sheet: 

company	reserves	secured loans	unsecured loans
Ballarpur Industries Ltd.	1520.18	386.45	475.63
Tamil Nadu Newsprint And Papers Ltd.	735.12	1054.9	308.01
Andhra Pradesh Paper Mills Ltd.	470.19	456.95	36.41
West Coast Paper Mills Ltd.	523.78	939.58	295.13
J K Paper Ltd.	391.99	392.15	156.06
Emami Paper Mills Ltd.	139.95	394.52	27.17
Seshasayee Paper & Boards Ltd.	213.34	288.83	36.57
N R Agarwal Industries Ltd.	51.02	88.23	0.63
Sirpur Paper Mills Ltd.	169.02	277.94	18.88
Pudumjee Pulp & Paper Mills Ltd.	113.52	61.63	6.6
Well Pack Papers & Containers Ltd.	11.12	18.01	1.38
South India Paper Mills Ltd.	59.36	16.47	0
Sree Sakthi Paper Mills Ltd.	20.11	25.32	4.3
Star Paper Mills Ltd.	121.76	4.23	0.01
ABC Paper Ltd.	34.3	153.93	41.72
Pudumjee Industries Ltd.	38.3	16.75	45.99
Magnum Ventures Ltd.	45.98	260.94	23.96
Malu Paper Mills Ltd.	21.05	75.02	9.09
Kay Power And Paper Ltd.	-15.12	19.52	13.27
Shree Bhawani Paper Mills Ltd.	-4.8	92.34	18.58
Rama Pulp & Papers Ltd.	10.54	0.08	3.31
Citadel Realty & Developers Ltd.	-9.05	0	4.05
Speciality Papers Ltd.	7.11	14.38	31.02
Chhattisgarh Industries Ltd.	-4.52	0	0
Nath Pulp & Paper Mills Ltd.	-46.25	44.97	12.01
Victory Paper & Boards (India) Ltd.	-7.08	0	0
Simplex Papers Ltd.	-3.9	0	15.21
Sarda Papers Ltd.	-6.62	2.18	4.3
Pitambar Coated Papers Ltd.	0.42	7.87	2.67
Global Boards Ltd.	-45.56	82.15	15.75

 A comparison of the sales and profitability: 

company	sales	net profit	interest	NPM
Ballarpur Industries Ltd.	1026.9	58.28	22.32	0
Tamil Nadu Newsprint And Papers Ltd.	1068.66	126.06	46.18	11.74
Andhra Pradesh Paper Mills Ltd.	650.42	54.19	32.16	8.24
West Coast Paper Mills Ltd.	628.86	54.7	11.15	8.69
J K Paper Ltd.	1106.49	91.03	48.49	8.22
Emami Paper Mills Ltd.	397.89	6.99	23.93	1.75
Seshasayee Paper & Boards Ltd.	517.27	39.93	28.4	7.71
N R Agarwal Industries Ltd.	378.85	21.59	8.61	5.69
Sirpur Paper Mills Ltd.	340.33	-11.84	25.77	-3.48
Pudumjee Pulp & Paper Mills Ltd.	225.77	10.28	1.51	4.55
Well Pack Papers & Containers Ltd.	20.42	0.4	1.57	1.9
South India Paper Mills Ltd.	128.1	13.77	1.86	10.73
Sree Sakthi Paper Mills Ltd.	143.26	4.64	5.15	0
Star Paper Mills Ltd.	260.91	8.33	2.75	3.18
ABC Paper Ltd.	212.48	-12.52	17.09	-5.88
Pudumjee Industries Ltd.	72.83	1.75	-1.06	2.4
Magnum Ventures Ltd.	132.5	-19.27	22.65	-14.37
Malu Paper Mills Ltd.	122.17	-7.73	9.1	-6.19
Kay Power And Paper Ltd.	15.99	0.85	0	5.32
Shree Bhawani Paper Mills Ltd.	125.92	-4.64	11.71	-3.62
Rama Pulp & Papers Ltd.	52.01	4.33	0.1	8.27
Citadel Realty & Developers Ltd.	0	-0.1	0.01	0
Speciality Papers Ltd.	110.36	0.12	1.76	0.11
Chhattisgarh Industries Ltd.	0.69	-0.47	0	-55.5
Nath Pulp & Paper Mills Ltd.	55.94	-2.35	0.2	-4.17
Victory Paper & Boards (India) Ltd.	3.92	-1.43	0.62	-36.56
Simplex Papers Ltd.	0	-9.9	0	0
Sarda Papers Ltd.	1.2	0.26	0.07	19.74
Pitambar Coated Papers Ltd.	9.56	0.91	0.63	7.86
Global Boards Ltd.	0.23	-7.68	0	-2373.01

 Rama pulp and South India look like the better ones to me. 

Tamil Nadu Newsprint and Papers (TNPL) - 531426

Name of Company	Tamil Nadu Newsprint and Papers (TNPL)
BSE Code	531426
NSE Code	TNPL
ICICI Code
Established
My Take	Like
Headquarters	Guindy, Chennai
Promoters	Tamil Nadu Government
Story	The factory is in Karur. This is a >1000 Cr revenue paper manufacturing company with a very good NPM.
Sector	Paper
Sub-sector	Paper mainly from Bagesse (sugarcane waste).
Website	http://www.tnpl.com/
Positives	35% Promoter shareholding by TN government. Huge holdings by LIC, GIC, etc. Regularly profitable company. regular dividend payer at around August of every year - yield at current prices would be greater than 1.75% assuming Rs. 2.50 minimum dividend.
Negatives	Slow growth in revenue and profits - 50% in 5 years. Huge interest costs are bringing margins down.
Peers	JK paper (biggest player in India), West Coast Paper, Ballarpur, AP Paper
News
Price @ blogged	140 (20-Apr-2011)
Cost of company	965 Cr for a 126 Cr FY10 NP makes it 7.65 times. For a company with 1362 Cr total debt and 735 Cr reserves, this seems slightly more than what it is worth. But as this is the 4th biggest paper manufacturer and one with 10-12% NPM, this is acceptable. Paper companies dont grow more than twice in ten years - So, understand that before you buy.

How to analyze Bank Stocks - Fundamental Analysis of Banks

Parameters	Considerations
CAR	Capital adequacy ratio(Tier 1 and tier 2 capital/ Risk weighted assets) - RBI stipulates this at > 9%. Indian banks do have 12-14% mostly
Financial leverage	12 times is the average in the financial institutions
NPA	Non performing assets - Low NPA is good (Say gross <1.5% and net < 0.5%)
Provisional coverage ratio	Provisional expense/Gross NPA – greater the better (say greater than 100%)
NIM	Net Interest Margin - 3% or more is considered good. 4% is excellent. At least 2% is needed for reasonable profitability
Revenue growth	Just like any other sector, banks also need good revenue growth
RoE	15 to 20% return on equity is considered good. It is easy to boost returns by leveraging up the balance sheet or under provisioning. So, RoE should be seen in context of RoA. RoE is based on the levers – net margins, Asset turnover and financial leverage.
RoA	Greater than 1.2% return on assets is considered good. RoA is based on the levers – net margins, Asset turnover and financial leverage.
Efficiency ratio	This is the Cost to income ratio – operating expenses (non-interest expenses) as a percentage of income.
P/B	Price to book ratio is appropriate as book values are marked to market every quarter (acceptable value). Big banks trade at 2 to 4 times book value.

Sree Sakthi Paper Mills Ltd - 532701

Name of Company	Sree Sakthi Paper Mills Ltd
BSE Code	532701
NSE Code	Not Listed
ICICI Code
Established
My Take	Like
Headquarters	Cochin
Promoters	Sree Kailas group (S Sivathanu Pillai, son - S. Giridhar)
Story
Sector	Paper
Sub-sector
Website	http://www.sreekailas.com/Paper_Division.php
Positives	Huge dividend yields at 5% or more at current price (assuming Rs. 1.50 or more). Revenue has increased almost 3 times in the lasst 5 years - 57 Cr in FY06 to 143 Cr in FY10. Net profit has increased a little more than 2 times - 4.64 Cr in FY10 compared to 1.71 Cr in FY06.
Negatives	2-3% NPM's. It has 20 Cr of reserves and 30 Cr of loans. The interest cost of about 4-5 Cr for the past 3 years has kept the net profits lower.
Peers
News
Price @ blogged	30 (18-Apr-2011)
Cost of company	49 Cr market cap for a 4.64 Cr FY10 net profit makes it more than 10 times. It has around 20 Cr of reserves and 30 Cr debt. Can buy for big dividend, but buy lower when risk is lower, say less than 5 times PE.

BSE - Group A and Group B revisions

The Bombay Stock Exchange (BSE) today announced revision in Group A securities. The BSE will shift 19 scrips from Group B to Group A and transfer 18 scrips from Group A to Group B effective from April 11, a statement from the bourse said here. The firms to be shifted from Group B to Group A include Apollo Hospitals, Atlas Copco (India), BF Utilities, Chambal Fertilisers & Chemicals, Coal India, Core Projects & Technologies, Emami, GlaxoSmithkline Consumer Healthcare, HMT, Indiabulls Power, Ispat Industries and Jubilant Foodworks. Among other scrips, Manappuram General Finance & Leasing, MOIL, Oberoi Realty, Rajesh Exports, SKS Microfinance, Sterling International Enterprises and United Breweries will be included in Group A, the release said. The 18 scrips to be shifted from Group A to Group B include Alstom Projects, CESC, EIH Ltd, Godrej Properties, GTL Infrastructure, Hindustan Oil Exploration Co, Hindustan Construction Co, IL&FS Transportation Networks, IVRCL Infrastructures, Jai Corp, Jubilant Life Sciences, MTNL, Nagarjuna Construction, Procter & Gamble Hygiene & Healthcare, Punj Lloyd, SJVN Ltd, TVS Motors and Welspun-Gujarat. Meanwhile, BSE has also decided to revise its Mid-cap and Small-cap indexes effective April 11. It will include Areva T&D India, Tata Communications, Housing Development & Infrastructure, Pantaloon Retail, DB Realty, Vardhman Textiles, Spice Mobility, TTK Prestige, Abbott India and Page Industries, among others, in BSE Mid-Cap Index. The BSE exclude Exide Industries and PTC India from BSE TASIS Shariah 50 index, the release said.