Orient Paper- Best Is Yet To Be Seen

Orient Paper was recommended by us on Muhurat day at Rs. 32, now ruling at Rs. 38, a rise of over 18% seen in less than 1 week. Orient Paper Board is meeting on 13th November, to approve Q2 numbers and it is learnt that the company had sold and monetized 12.46 lakh shares of Century Textiles, in Q2, on which LTCG of Rs. 100 cr will get booked in Q2 numbers, as cost per share was less than Re. 1 to the company.

It is also learnt that even 1.46 lakh shares of Ultratech Cement were monetized in Q2 for Rs. 100 cr, while this entire amount will come as LTCG , as cost is NIL per share to the company. This will see an exceptional gain of Rs. 200 cr in Q2, making company debt free, even on working capital, thus seeing annual reduction of an interest of Rs. 18 cr.

Company had a Term Loan of Rs. 47 cr and working capital loan of Rs. 63 cr as at 31-3-21. Orient Paper has been the largest player in domestic tissue paper segment, with a market share of ~12% and capacity of 50,000 TPA, as also, having presence in Writing & Printing Paper, with a capacity of 55,000 TPA (next closest player is Century Textiles & ITC).

Company has a strong balance sheet now, with tiny equity of Rs. 21.22 cr (FV Re.1), with Net worth of Rs. 1,450 cr, with Nil debt now, while it still holds 9.06 lakh equity shares of HIL Ltd. having NPV of Rs. 405 cr. Company also holds land bank and real estate properties worth around Rs. 1,200 cr against its current market capitalization of Rs. 810 cr.

Such stocks will first see ACCUMULATION & then shall give a Big BREAK OUT, as Best is yet to be seen.

This is not a Buy or Sell recommendation, while stock recommendations are provided exclusively to our paid members in the Member Zone.