December 26, 2016 / 16:54 IST
AUM Capital's research report on West Coast Paper Mills
West Coast Paper Mills Ltd (WCPML), incorporated in 1955 is the flagship company of S.K. Bangur group. The company is among India’s top five paper & paper board’s manufacturer in terms of total capacity of 320000 mtpa. WCPML operates in two business segments; Paper/Paperboard (including Duplex Board) at Dandeli and Telecommunication Cables at Mysore. The company also has Wind Mills of 1.75MW capacity in Tamilnadu for power generation. WCPML has a share of 10% in the domestic uncoated paper market. Outlook
WCPML is currently manufacturing close to full capacity and operating margins have improved to 17.8% in H1FY17. The company plans to become debt free in next two years and expects 5% hike in paper products which will improve revenue growth going forward. We value the company on the basis of EV/EBIDTA of 4.0x of FY18e EBIDTA and recommend a BUY with the target price of Rs.169.
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