Orient Paper & Industries Ltd

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RISKSOversupply in cement sectorCurrently there is an oversupply in the cement sector due to decrease in demand due to ongoingmonsoon season during which construction activity is at its trough.Days lost due to annual shutdown<strong>Paper</strong> production for the year under review was again disrupted during the year under reviewinitially for plant up gradation and subsequently for water shortage. In all company lost productionfor 76 days during the year.Increase in the price of raw materialsPossible increases in cost of coal, wood and bamboo continue to remain areas of concern whichmay impact profit marginsSources: Ace Equity, Company Annual Reports, ANS Research
RecommendationsAt current market price of ` 62 the company is trading at a trailing PE of 7.6 against industry PE of8.88 and with a beta of 0.6986. We expect FY 11 (E) EPS to be ` 9.86 and FY 12 (E) EPS to be` 11.04. So at CMP of ` 62 OPIL is trading at a one year forward PE of 6.28 and a two yearforward PE of 5.61.Taking an industry PE of 8.88 and the forward earning our target for FY 11 (E) comes out to be` 87.55 with an potential upside of 41% and our target for FY 12 (E) comes out to be ` 98 with anpotential upside of 58%.Sources: Ace Equity, ANS Research
Page 1 and 2: Orient Paper & Industries Ltd.13 th
Page 3 and 4: . OutlookThe company is planning to
Page 5 and 6: FINANCIAL HIGHLIGHTS2,500.002,000.0
Page 7 and 8: CASH FLOW(IN CRORES)Particulars Mar
Page 9 and 10: POSITIVESDiversified portfolioThe c
Page 11: Electrical divisionThe company is t

Orient Paper & Industries Ltd

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