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Contents :-
👉Paper realization
👉Major beneficiaries
👉Valuations
👉Indian paper industry
👉Growth visibility
👉Margin profile
👉Technical analysis
👉Paper realization
👉Major beneficiaries
👉Valuations
👉Indian paper industry
👉Growth visibility
👉Margin profile
👉Technical analysis
First, lets talk about Paper realization🧻
👉Paper prices have gone up in the past 6 months.
👉All domestic mills are operating at full capacity due to shortage of paper supplies in global market, implementation of single plastic ban (1 July 2022) & New education policy (FY24).
(2/9)
👉All domestic mills are operating at full capacity due to shortage of paper supplies in global market, implementation of single plastic ban (1 July 2022) & New education policy (FY24).
(2/9)
Now, lets talk about the major beneficiaries🤑
👉Jk Paper & West Coast Paper would be the major beneficiaries due to high dependency of domestic wood, ability to tap the growing packaging demand & strong balance sheet.
👉Small & mid size makers would not tap the packaging demand as very large capex is involved.
(3/9)
👉Small & mid size makers would not tap the packaging demand as very large capex is involved.
(3/9)
Now, lets talk about valuations🪙
👉Both JKP & WCPM are trading below historical average EV/EBITDA multiple.
👉There can be a strong case of re-rating due to structural improvement in business risk profile & sharp improvement in return ration profile.
(4/9)
👉There can be a strong case of re-rating due to structural improvement in business risk profile & sharp improvement in return ration profile.
(4/9)
Now, lets talk about the Indian Paper Industry 📰📰
👉It will keep working at full capacity for 3 years due to limited capex & healthy growth rate.
👉Reopening & New Edu policy will drive growth for printing & writing paper.
👉All major capex is planned for packaging board segment which is expected to grow at 10-12%.
(5/9)
👉Reopening & New Edu policy will drive growth for printing & writing paper.
👉All major capex is planned for packaging board segment which is expected to grow at 10-12%.
(5/9)
Now, lets talk about the growth visibility for JK Paper & West coast paper mills📈📈
👉Capacity share has gone up in the past 3 years due to capex via inorganic route.
👉JKP & WCPM will gain market share due to good financial risk profile, weak financial risk profile of top 2 paper cos, other cos have small size & are not keen to grow paper business.
(6/9)
👉JKP & WCPM will gain market share due to good financial risk profile, weak financial risk profile of top 2 paper cos, other cos have small size & are not keen to grow paper business.
(6/9)
Now, lets talk about the margin profile of JK Papers & West coast paper mills💸💸
👉JKP & WCPM enjoy superior margin profile due to strong focus of management to improve operating efficiencies.
👉EBITDA margin profile will improve due to tight paper supplies, surge in paper exports, increase in global pulp prices & growing global packaging demand.
(7/9)
👉EBITDA margin profile will improve due to tight paper supplies, surge in paper exports, increase in global pulp prices & growing global packaging demand.
(7/9)
Now lets do a technical analysis of both companies📈📉
Weekly chart of JK Paper
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Weekly chart of West coast paper mills
(9/9)
(9/9)
I hope my thread helped you in knowing Paper sector better than before. Please don't forget to join our telegram channel its absolutely FREE & we are doing a lot of hard work here. telegram.me
Thanks for reading,
The Market Learner.
Thanks for reading,
The Market Learner.
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