Why You Should Invest In Tamil Nadu Newsprint & Papers Ltd

TNPL posted a good set of numbers in the quarter ended March 2006. Sales increased by21% to Rs 209.16 crore. OP grew impressively by 117% to Rs 50.85 crore on higher revenue growth and advancement in OPM from 13.6% to 24.3%. The resultant PAT went up by 45% to Rs34.60 crore. The performance was attributable to buoyant paper prices, increased production, and 100% capacity utilisation. Power generation and surplus export to the state grid also contributed to the revenue.
FOR JUNE QUARTER

The company has posted a profit after tax of Rs 18.81 crore for the quarter ended June 30, 2006 (Q1 FY 06-07) as compared to Rs 13.14 crore for the quarter ended June 30, 2005 (Q1 FY 05-06). Total Income has increased to Rs 183.70 crore for Q1 FY 06-07 from Rs 177.59 crore in Q1 FY 05-06.

POSITIVE FOR TNPL

1- has taken up plantation activities to augment the sources of wood supply.

2- has planned to raise pulpwood plantation in 10,000 acres.

3- The Mill Development Plan (MDP) will be completed by june 2007.

4- pulp capacity will be increased from 520 tpd to 800 tpd.

5- capacity will be increased from 230,000 tonnes per annum to 245,000 tonnes per annum.

6- TNPLwill install a new Paper Machine (PM3) and increase the productioncapacity to 3,65,000 tonnes per annum. The enchanced capacity will be operational from FY 2009-10.

7- TNPL posts 43% rise in Q1 PAT.

8- The Company is developing Farm Forestry and CaptivePlantation in a massive way.

9- The company has also exported power generated from its 28 MW wind farm entirely to the Tamil Nadu Electricity Board’s grid.

10- The production during 2005-06 is reportedly more than 2.30 lakh tonnes against the previous year’s 1.96 lakh tones.

11- less than 2% of the production was newsprint, which offers lower margins.

12- had exported 38,645 tonnes of printing and writing paper.

13- the total dividend for the year is 30%.

14- expectation of strong results in the coming qtr.

15- paper industry has benefited from Union Budget 2006-07 as excise duty on printing and writing paper was reduced from 16% to 12%.

16- the proposed price hike waspostponed to a later period.

17- Now, large players are again contemplating increasing prices of paper.
18- sustained growth in domestic demand.
19- enrichment of product mix.
20- can considerably improve its global competitiveness if the government allows the industry to develop degraded forestland.

PRODUCTS:

Product Name
Sales (Rs.in Crores)
Paper-Printing & Writing
727.11
Excise Duty
73.55
Energy-Non-Conventional-WTG
31.05
Discounts
26.14
Newsprint
14.69

SHARE HOLDING PATTERN:(%)

Foreign Holdings
3.43

Govt. / Financial Institutions
42.68

Corporate Bodies(not covered above)
6.08

Directors and their Relatives
35.32

Other including Indian Public
12.5


TARGET PRICE: By dec06 expected price for TNPL is Rs 140/-
CMP(Current Market Price): Rs 95/-
TNPL is available at attractive Price.