Pudumji Paper Products Limitd :539785 FV-Rs-1 : Buy at CMP of Rs 14.9- 15.2 1 year Target Price 22

About Company:  Pudumjee Pulp & Paper Mills Ltd. (PPPM) established in the year 1964, started with the manufacture of high quality papers to meet customers critical and demanding requirement in packaging of food and oily products. Since inception, PPPM, over the decades have continually expanded their products offering, pioneering many a product line in India and have established, in the market place, their name for quality and reliability.

Pudumjee Paper Products Limited was incorporated on 14th January, 2015 as a public limited company under the provisions of the Companies Act, 2013.

Pursuant to the Scheme of Arrangement and Reconstruction (Demerger) between Pudumjee Pulp & Paper Mills Limited (PPPM), Pudumjee Industries Limited (PIL), Pudumjee Hygiene Products Limited (PHPL), Pudumjee Paper Products Limited (PPPL) and their respective Shareholders and Creditors, the paper manufacturing businesses of PPPM, PIL and Hygiene products  business of PHPL have been transferred to Pudumjee Paper Products Limited with effect from 1st April, 2014 . Company’s manufacturing capacity of 60,000 MT per annum comprises of 2 state of the art fourdrinier specialty paper machines supplied from Voith Sulzer Germany .and  2 Yankee Machines with combined capacity of 22,000 MT per annum for production of crepe tissue products, M.G. Papers and other specialty products. The paper machines, equipped with on-line quality control systems can produce wide range of products from 17 gsm to 100 gsm basis weight, with an ability to go even higher.

GlobalPresence
PPPL’s distribution network has a presence Pan-India and an effective reach in Europe, South-East Asia, U.A.E, and Iran amongst others. PPPL’s customer focused initiative, backed by qualified team of personnel and enviable research facilities have helped PPPL establish a loyal and expanding customer base.

Pudumjee Hygiene's Brands
Greenlime
Greenlime is the umbrella brand with a range of hygiene solutions that has energized the hygiene industry through innovation, dazzling design, an array of colors (replacing regular whites), and a variety of sizes, based on an understanding of consumer attitudes and usages. Beginning with tissues, under the Greenlime brand, it cover the entire spectrum of hygiene solutions including soap and tissue dispensers, bathroom and facial tissues, paper hand towels, paper napkins, kitchen rolls, toilet rolls, personal toilet seat cover systems, hand-wash solutions, odor neutralizes, hand sanitizers, and cleaning solutions, with more being added regularly. Today, Greenlime has become synonymous with hygiene solutions in India.  products adorn the shelves of the most prestigious stores in India like Big Bazaar, Spencers, Nigiris, Star Bazaar, Metro Cash YV Carry, to name a few. It is committed to spreading a more hygienic and healthier lifestyle to the teeming millions.
Fosilvra
Fosilvra dispensers are a delight for connoisseurs of style. Swedish for silver, Fosilvra dispensers are a stylish line of sleek steel dispensers with classic Scandinavian looks. Balancing functionality with style, these futuristic dispensers give washrooms in India—particularly at high traffic and upper end locations like airports—the proverbial silver lining. Architects and interior designers take special delight in it.
Ecoline Plus
Ecoline natural tissues made from 100% natural fibre meant to enable heavy tissue users of Indian corporate arrest ecological degradation. It provides such an opportunity to corporate from the IT sector with a heightened sense of social responsibility, like Infosys, Nokia, TCS, Orchid, etc. Greenlime natural tissues offer an excellent performance, and are made of pulp that is not sourced from wood cultivations. These are manufactured with advanced technology, and are totally free of harmful chemicals that damage the environment.
Lush
Where Greenlime stands for premium hygiene products Lush is the brand which aims to provide quality hygiene products at economical prices. Products under Lush have been introduced to cater to the needs of bulk buyers like Restaurants & Catering Services. Lush is popular in the wholesale markets for it value for money products.

Financials Of Company:

Company has equity base of 9.5 crores subdivided in to equity share of face value of Rs 1 which are listed on NSE and BSE. It achieved sales turnover of 469 crores in year 2015-16 with NP of Rs 10.12 crores resulting in EPS of Rs 1.07.Almost 90% of revenue achieved from paper  business and 10% contribution was from hygiene products in 15-16.

Investment Positives:

1.        profit making  company with reserves of 195 crores

2.        Book value of Rs 20 (as on 31-3-2015).Price /Book>>0.75

3.        High Promoter stake67% with market cap of only 145 cr against annual turnover of  469 cr(15-16).

4.      Declared dividend of 10% for year 15-16.

Target price:  Share is available at CMP of Rs 14.9  at current PE multiple of 14-15 .Economy is set for decent growth in next 2-3 years this should help to increase the demand for hygiene products which would improve the profitability and stock price can see a major increase from current levels.Q-1 2016-17 topline saw growth of 7% in comparision to Q-4-2015-16 with NP of 3.5 crores. EBIDT for Q-1 on paper segment got increased by 9% hygiene business made little loss Based upon Q-1 results company can achieve NP of Rs 15 crores (a conservative estimate)in 2016-17 resulting in EPS of approx 1.5-1.6. Stock at CMP appears to be undervalued and can be bought for a one year target price of 22 .

Disclosure: I am personally holding shares of the company.