Today I am expressing my view on a hidden gems in paper industries .... Cosboard
As a Sector Paper Industries has long way to go and the demand of paper is exponentiallly increased. If you take bird eye view of the sector, following are major points to look upon.
Snapshot on Indian Paper Industry
1) India accounts for 2.6% of world paper production
2) India accounts for 1.6% of world paper consumption
3) The total size of the industry is estimated to be around Rs 50,000 crore
4) Per capita consumption of paper in India is 9.8 kilograms, while the global average is 58 kilograms
5) India’s paper consumption is expected to grow to around 40 million tonnes by 2026 from the current 14 million tonnes.
6) There are almost 28 established players in the Indian paper sector and consolidation of sector is possible.
7) The growth in e-commerce has opened a new opportunity for the sector
1) India accounts for 2.6% of world paper production
2) India accounts for 1.6% of world paper consumption
3) The total size of the industry is estimated to be around Rs 50,000 crore
4) Per capita consumption of paper in India is 9.8 kilograms, while the global average is 58 kilograms
5) India’s paper consumption is expected to grow to around 40 million tonnes by 2026 from the current 14 million tonnes.
6) There are almost 28 established players in the Indian paper sector and consolidation of sector is possible.
7) The growth in e-commerce has opened a new opportunity for the sector
History of Cosboard
Cosboard industries Limited established in 1981 with 1st 15
TPD Board Plant as Private Limited Company and Created Market all over
India for its products.
It was further expanded in 1995 immediate after its Public issue and established 25 TPD Kraft Paper Plant and catered to neighbouring States; yet another expansion was completed in 2001 with 60 TPD Writing Printing & Newsprint Paper Plant and as on date has 3 units with production capacity of 100 M.T. per day over and area of 8.5 acres in Jagatpur Industrial Estate which is just 5 k.m. from Cuttack town and 25 k.m. from Bhubaneswar Airport.
The company makes Grey, Duplex, L.W.C. and Colour File
Boards manufactured in 1t Plant caters to packaging and stationery
manufacturers all over India.
Kraft Paper for corrugation industry and Kraft Paper Sheets
for stationary manufacturers also caters to Central and Eastern parts
of India,
Newsprint paper of high quality is successfully satisfying
day today needs of total Orissa and nearby States Newspaper Publishers.
Book Printing paper of high quality caters to Government
educational and notebook industry in Orissa and neighboring States.
Company is also able to cater to tailor made special items like Colour
Paper to suit quality end-users in Orissa and neighboring States.
Outlook
Promoter holding 47.1 % stake in company, cosboard posted 49 cr top
line and 2.5 cr bottom line in latest 9 month ended 2016-17. 65 cr top
line company is available just 15 cr market cap..... this stock just
trading 9 PE, and strong management clean balance sheet with good
customer basis stock trading relatively more attractive to its peer
group. Most of the paper stocks had rally in last few weeks but cosboard hasnt moved yet. Stock trading only in BSE @ 38. Few HNI hold stake in the
company.
Disc: I am shareholder of the company.
NOTE : THE ABOVE IS NOT A RESEARCH REPORT NOR A RECOMMENDATION BUT INFORMATION AS AVAILABLE ON PUBLIC DOMAIN.
NOTE : THE ABOVE IS NOT A RESEARCH REPORT NOR A RECOMMENDATION BUT INFORMATION AS AVAILABLE ON PUBLIC DOMAIN.
Registration status with SEBI: I am not registered with
SEBI under the (Research Analyst) regulations 2014 and as per
clarifications provided by SEBI: “Any person who makes recommendation or
offers an opinion concerning securities or public offers only through
public media is not required to obtain registration as research analyst
under RA Regulations”
very true stock
ReplyDeleteexcellent rally from your level. good work.......
ReplyDeletekeep sharing such stock in future.....
ReplyDeletethis stock seems to havoo much debt. why its not a concern
ReplyDeleteCAPEX on additional capacity of production has been done by Cosboard. Just check that the work in progress now added to Fixed Asset. Debt will reduce as Company uses its optimum capacity soon.
DeleteIt is the scenario in almost all turnaround case.
Sir, based on your reply above, so most of their debt is for capex. but their tax pay out seems to be not in line with gov tax policies going forward they have to pay more abt 33% of the PBT so their PAT will continue to struggle due to high interest payment and tax payout. isnt that correct
DeleteDear Sir,
DeleteHappy Easter. May God bless you, your family and all your blog readers with good health and all the happiness in life.
Happy Easter to you and your family too
DeleteDue to uncertainty of demand many company doesn't pay tax on qoq rather paid in 4th qtr. While tax is levied on PAT not on PBT. Many times co adopted accounting policy to post on yoy tax due to recent profitability. Even you can check suzlon just example you will get answer. Earlier it was in loss so net set of yearly amount is to be considered.
DeleteCompany has increases balance sheet by adding capacity. Wait some time to prove company.
cosboard 50++++ great pick
ReplyDeleteNow that cosbaord is operting at high utilization levels,we can expect cosboard to deliver an EPS of 6rs every quarter this year.since raw material prices have crashed since april 2017,there is a fair chance positive to the earnings of coaboard.i would like valuepick sir to put an result update on cosboard industries.
ReplyDeleteSure
DeleteI'm waiting for ur valuable reply value pick sir.
ReplyDelete