Two stocks to look for decent gain ahead

West Coast Papers and Bhansali Engineering Polymers are worth checking. West Coast papers is at Rs 173 and Bhansali Engineering Polymers is at Rs 103. 

Paper industry was a hit like many others due to COVID. Paper industry has not receoved as colleges, schools and offices were closed and are still mostly closed. But, due to high valuation of other industry, paper stocks may run now.
Anyway, West Coast papers is a great company. The stock is trading at very attractive valuation to buy. Sales in Sept is 20% lower but margin was a big hit.

Bhansali Engineering Polymers is going to get benefits from lower crude oil price in Dec quarter as well. In Sept quarter it has posted excellent result. The stock is at multiyear low.

BEPL is a vertically integrated petrochemical company that Manufactures ABS which acts as a raw material for leading companies dealing in Automobiles, Home Appliances, Telecommunications, Luggage, Bus Body and various other multifaceted applications.

 

I have mentioned Bhansali Engineering two times in this blog. One time BEPL has worked very good and second time BEPL has not. Bear market has not allowed it to work second time. 

In paper companies, West Coast is doing good from some year. I have mentioned  WSTCSTPAPR few times.

For monthly getting stocks ideas, do track my Twitter account.

West Coast Paper Mills

Paper stocks in limelight due to China story

Remember China story in Graphite India and HEG recently. Super duper gain for those who understood it. Can same or similar story unfolds here in Paper stocks!

China has stopped few pulp factories near coal plants due to pollution. This has resulted in pulp price go up and also higher paper prices in international market. Pulp is the raw material for paper of any kind. So, local manufacturers who has in-house pulp and paper making capacity will benefit.

I had discussed West Coast Papers and Ruchira Papers here. The post is published in Oct, 2016.

I choose Ruchira Papers at Rs 114.35 and West Coast Paper at Rs 126 for few months.

CMP of West Coast Paper: Rs 291. It reached to Rs 315 at high.
CMP of Ruchira Papers: Rs 198.8. It was at Rs 206 at high.

So, both has given superb gain.

Recently, in Sept, 2017, I have talked about Paper industry (Paper sector of India: few points) in general here. That time, China story was not there.


Here are few links which talk of China story:

https://www.bloombergquint.com/markets/2017/12/11/china-stopping-pulp-production-pushing-up-paper-stocks-ruchira-papers-says

https://economictimes.indiatimes.com/markets/stocks/news/better-valuations-of-paper-companies-just-a-matter-of-time/articleshow/61941670.cms

Support from China Story and Lower valuations of Paper Stocks can rerate all Paper stocks here. Many has reduced its debt over past few quarters. We can think of better days ahead for Paper Stocks. But do your own research before investing. 

Update:

Information about many paper companies and information about paper industry is also present.

Paper sector of India: few points

I was reading articles and thought to share few points from that.

I read that paper companies are facing import problem from many years. Govt want to make in India but do very little for the industry. Sometimes they do and reduce taxes but not much beyond that.

Our industrialists seems to be not ready or uncompetitive in global market. Free trade agreements are not helping India. India could not increase its export that much but import has improved faster after many free trade agreements.

Paper companies are similar sector where Indian govt policies are harming it. See how progressive is the import, which is bad for our local paper manufacturers.

Industry want anti-dumping duty on Import.

This is happening due to pulp/fiber is not available as much as the requirement in India. Wood is costlier in India and that make competition tough for Indian. Paper Industry want to raise pulp tree at sparse space in India in collaboration with Govt.

You know interest rate on loan is too high in India, which every industry faces. but makes our industries uncompetitive.

---

GST on import will provide some relief to local paper manufacturers.
Import from South Korea will be at 0% import from Jan, 2018. Don't know, if new GST won't affect or affect it.

Under the India-Korea CEPA, the basic customs duty has been progressively reduced and will be 0% with effect from January 2018. Imports of paper and paperboard into India from ASEAN in the last six years have grown at a CAGR of over 42 per cent. Imports from South Korea have grown at a CAGR of 60 per cent.

Unorganized players are facing environmental compliance issue and will face tougher challenge post GST.

---

Also, due to old technologies, energy cost is higher for unorganized sector.


India is a fiber-deficit country. With raw materials accounting for around 50 per cent of the cost of production, availability of fibre is the biggest constraint faced by Indian paper industry. Power and Fuel constitute about 16% of sales.

More

Printing and writing paper accounts for nearly one-third of the total estimated demand of about 15 million tonnes.

Worldwide paper industry is facing muted demand but in India, growth is there and will stay for 5 years atleast.


Paper mills’ performance: As TNPL, Ballarpur slip, peers improve Q1 profits: West Coast Paper, of which Bangur is the Vice-Chairman, tripled its net profit in the first quarter and is targeting the mass market segment in copier paper.

The growth will be largely driven by printing and writing and packaging and paper board segment. Newsprint paper can face more problem due to import. Imported part is also more in newsprint paper.

Ruchira papers and West Coast Papers: Value and Growth Stocks

Papers stocks are gaining ground. Analysts think paper will gain in price as input cost are cheaper and will stay. Few companies are shut down globally, analysts say. That I didn't checked but recently Balarpur Industies forced to close three plants. That caused gain in demand for competitors. Balarpur Industries is a very big paper manufacturer.

I choose Ruchira Papers at Rs 114.35 and West Coast Papers at Rs 126 for few months.

I mentioned these stocks few hours earlier on Facebook group. To join find link on sidebar.