Kindly let me know the future of Orient paper? Is there any news of its demerger? Should I Hold or Sell? - Vinit Sakhuja
Orient Paper & Industries Limited is engage d in the business of manufacturing pulp and paper, electric lighting equipment as well as electrical fans. The company operates in various segments, including paper, electrical consumer durables, among others. In the paper segment , the company is engaged in the manufacture and sale of pulp, paper and board, and chemicals.
In the electrical consumer durables segment, the company is engaged in manufacturing/purchasing and sale of electric fans, including ceiling, portable and airflow, as well as components and accessories thereof, lights and luminaries, household appliances and switch gears.
On the financial front, Orient Paper & Industries witnessed a 60.92 per cent rise in its net sales to ₹155.23 crore in the first quarter of FY18, as against ₹96.46 crore in first quarter of the previous year. The PBIDT of the company rose to ₹21.12 crore in Q1FY18 as against PBIDT of ₹- 7.54 crore in Q1FY17. The profit after tax of the company increased to ₹8.26 crore in the first quarter of FY18 against a loss of ₹10.97 crore in the first quarter of the previous fiscal.
On an annual basis, Orient Paper & Industries witnessed a rise of 3.43 per cent in its net sales to ₹1,995.25 crore in
FY17 in comparison with the net sales in FY16 . The PBIDT of the company grew 31.01 per cent to ₹130.30 crore in FY17, as against ₹99.46 crore in FY16 . The profit after tax of the company increased 140.68 per cent to ₹50.59 crore in FY17 as compared to ₹21.02 crore in the previous fiscal. There has been no confirmation by the company regarding the prospect of a demerger. The company has maintained a TTM PE ratio of 36.10x in line with the industry PE stood at 32.97x. Meanwhile, the company ’s peers JK Paper and Emami Paper maintained a TTM PE of 9.92x and 50.03x, respectively. The stock is likely to provide good returns on the bourses. We recommend the reader-investors to HOLD the stock.