This week in our pick of the week segment, we have initiated report on company named West Coast Paper Mills Ltd at price of 95 with 12 month target of 135. We believe the Indian paper industry deserves a re-look as it is the 15 largest paper industry in the world. Every 1kg increase in personal consumption of paper will boost total demand for paper by 15% p.a. for the country as a whole. Domestic demand for paper is expected to reach 17Mn tones by 2016 and this is almost double of what it did in 2009. Foreseeing this demand, WCPL which is a fully integrated paper mill undertook a major capacity enhancement plans from 180000 tones to 315000 tones. We believe company shall benefit from economies of scale and its changed product mix shall see a significant improvement in operating margins in the coming quarters and hence we are bullish on the stock.
Published by geplcapital
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