ORI­ENT PA­PER

Dalal Street Investment Journal - - QUERYBOARD -

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.

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