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Genus paper & boards: The dark horse

India Notes 2018-08-10 17:59:43


Valuation conclusion
The Paper Industry in India is growing steadily within creasing demand from various customer segments like education, business &corporate and commercial printing. The demand and growth drivers have come from a combination of factors such as rising in come levels, growing per capita expenditure, rapid urbanization, industrial production, government spending on education and increased school enrollments. Higher disposable income coupled with urbanization is expected to drive new and different consumer behaviors and drive demand for paper products.
Company have performed very well for the FY2018. Along with improved sales volumes, the mix has changed favorably towards the value-added products. The ban on plastic in UP will further boost the demand for the Kraft paper for manufacturing of paper bags& Genus being the dominant player in North India, would stand to benefit for the same. Moreover ,company's focus on Premium products going forward, Brown field expansion, signing of MOU, add new capacities via organic and inorganic modes & Strong clientele(catering to packaging needs of multiple industries- Dabur, Unilever, Havells, LG, Lays, Pepsi, Samsung, Patanjalietc.) attracts the share price at current levels.
Estimating the share price of the company as per P/E valuation, the estimated share price for next 2-3 years tenure turns to be around`20-25. We recommend to Accumulate the stock at current levels to achieve long term gains.



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