Star Pa­per Mills

Dalal Street Investment Journal - - SPECIAL REPORT -

Star Pa­per Mills Lim­ited (SPM), es­tab­lished in 1938, is an in­te­grated pulp and pa­per mill. The com­pany is part of Dun­can Goenka Group. The com­pany pro­duces a wide range of pa­pers such as SS maplitho white/nat­u­ral shade, greet­ing pa­per, kraft pa­per, pad­ding pa­per, MG poster, Stiffner cover, car­tridge pa­per, Azure­laid, and many more. Th­ese prod­ucts have ap­pli­ca­tions in pa­per print­ing, lot­tery print­ing, com­puter sta­tionery, book print­ing, pack­ag­ing var­i­ous prod­ucts, de­fence/am­mu­ni­tion pack­ing and many more. The com­pany has an in-house R&D unit recog­nised by the Min­istry of Sci­ence & Tech­nol­ogy, Govt. of In­dia. The com­pany mostly caters to de­mand in the do­mes­tic mar­ket.

On the fi­nan­cial front, SPM posted 18.92 per cent in­crease in its rev­enue to 88.93 crore in Q1FY18 from 74.78 crore in Q1FY17. The com­pany’s PBDT in­creased 16.27 per cent to 19.15 crore in the first quar­ter of FY18 on a yearly ba­sis. The com­pany’s net profit rose 5.96 per cent to 13.52 crore for the cor­re­spond­ing pe­riod. On an an­nual ba­sis, the com­pany’s rev­enue rose 18.96 per cent to 324.12 crore in FY17 com­pared to the pre­vi­ous fis­cal. The com­pany’s PBDT rose 184.95 per cent to 71.21 crore in FY17 on a yearly ba­sis. The com­pany’s net profit rose tremen­dously from

16.5 crore in FY16 to 59.94 crore in FY17, reg­is­ter­ing 262.27 per cent in­crease.

The com­pany’s PE stood at 4.60x, whereas its peers Tamil Nadu Newsprint and Kuan­tum Pa­pers PE stood at 23.18x and 8.37x, re­spec­tively. We ex­pect price of SPM to rise.

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