Watch the interview of SP Tulsian of sptulsian.com with Latha Venkatesh, Sonia Shenoy, and Anuj Singhal on CNBC-TV18, in which he shared his outlook on Seshasayee Paper.
Below is the verbatim transcript of the interview.
Q: What are you watching?
A: I am recommending Seshasayee Paper because we are quite positive on the paper sector going forward because of the developments happened in the sector with waste paper import ban by China and many of the production units having closed in China. So, because of that the Asian region or maybe the South-East Asia has seen the increasing their prices because of their huge demand and benefit of that is seen here in India also. Seshasayee Paper is a Tamil Nadu based company and last year they have suffered because of the severe drought prevailing in the Tamil Nadu region and because of that we have seen their FY17 second half performance to be dull and actually that has started improving now from Q3. In spite of that the H1 number of FY18 were not that bad as it was projected to be or as it feared to be with company having posted Rs 38 earnings per share (EPS) for H1 FY18.
If I quickly go, they have presently two paper mills with a combined capacity of 1,95,000 tonne per annum and this capacity at both the mills are getting enhanced to 2,75,000 tonne per annum which should be operational in maybe next 6-8 months. Going forward if you really see the kind of raw material which they are using is 55 percent bagasse and 45 percent is hard wood and both are available in plenty. Bagasse is available from the associate company or group company that is Ponni Sugars Erode. In fact Ponni Sugars was established by the promoters of this company to cater to this paper mill only and that is seen to be quite positive.