Rajen Shah of Angel Broking is of the view that Ballarpur Industries can test Rs 50.

Shah told CNBC-TV18, "We have liked paper industry for a long-time but it has been underperforming and fortunately now we are seeing some action in Ballarpur Industries. We actually like both Ballarpur and Tamil Nadu Newsprint. Ballarpur recently completed the buyback which has reduced its equity by about 40% from about Rs 185 crore to about Rs 110 crore. The company has also split the stock and the indications from the management are pretty bullish."

He further added, "The company is likely to do well because the allocation of the scheme of Sarva Shiksha Abhiyan which the government runs for the poor has increased substantially. Second, almost 6,000 new schools are likely to come up over the next three-five years and obviously the demand for writing and printing paper is going to be buoyant. Third, with the economy doing well, I think paper is something which is going to be very much in demand."

"Ballarpur after the buyback for June ’09 should easily report about Rs 5.5 earnings and it’s quoting at about Rs 28-29 levels. Its quoting at just about Rs 5-5.5 times the June ’09 earnings. The stock can easily move up to at least Rs 35-40 levels without any effort. I think the fair price for this stock is at least Rs 50 over the next 12-18 months."