STAR PAPER MILLS LTD (516022) (29.35)
Star Paper Mills is engaged in manufacturing
of paper and paper related products. Incorporated in 1938, the company is part
of Duncan Goenka Group. Star Paper has received ISO 9001:2000 and ISO
14001:2004 certifications for its quality management. To produce its raw
material, the company owns 34983 hectare on which 270 lakhs saplings have been
grown spread across seven districts of western Uttar Pradesh and two districts
of Uttranchal. The company has started Clonal Technology Programme with an
intension to increase the yield per unit area. The paper major has developed
fully automatic green houses and hardening chambers at Tapri for production of
clonal plants. Star Paper Mills produces range of products used in industrial,
packaging and cultural papers catering to almost all segments of consumers. The
company has an installed manufacturing capacity of 75,000 tonnes per annum of
paper and paperboard. Its clients include Century, Laminating, Eveready,
Greenply, Thomson Press, Hindustan Lever, ITC, Pearson Education (Singapore),
Shree Krishna Paper and Thomson Press, among others.
It has an equity base of just Rs.15.61 crore
that is supported by reserves of around Rs.16.66 crore. It has a share book
value of Rs.30.63& price to book value ratio is just 1 which is highly
impressive.
The Promoters hold 53.06%, DIIs hold 3.61%
while the investing public holds 43.33% stake in the company. Promoters holding
were 45.37% after June 2014 which is increased to 53.06% after June 2015. Means
promoters have increased their stake by 7.69% in one year which is very
positive sign.
Financial Performance
|
|
Q1FY16
|
Q1FY15
|
FY15
|
|
Sales
|
66.08
|
61.16
|
271.30
|
|
Profit Before Tax
|
3.70
|
-1.38
|
7.51
|
|
Tax
|
-0.20
|
0.06
|
-8.03
|
|
Profit After Tax
|
3.90
|
-1.44
|
15.54
|
|
EPS
|
2.50
|
-0.92
|
9.96
|
SPML has made
heavy losses in last 4 years. However, fortunes of company have started
improving in current year. SPML has reported vastly improved nosYoY basis. For
Q1FY16, SPML has reported sales of Rs.66.08crore as against Rs.61.16core in Q1FY15.
While it has recorded net profit of Rs.3.90crore against loss of Rs.1.44crore.Q1FY16
EPS stood at Rs.2.50. The scrip is trading at P/E multiple
of just 2.2.
Stock is looking explosive for investment.
Investors can buy this stock with a stop loss of Rs.40. On the upper side, it
will zoom to Rs.55--60 levels in the medium term while stock may zoom up to
Rs.100--120 in the next 12---15 months.Its all-time high rate is Rs.118.7……
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