Analysing the price-to-earnings (PE) ratio gap between the current PE and the historical 10-year average PE offers insights into whether a stock is undervalued or overvalued. A current PE lower than the historical average indicates undervaluation, suggesting potential for PE multiple expansion, while a higher current PE suggests overvaluation, indicating possible mean reversion.
| Name | Price to Earning | Historical PE 10Years | Market Capitalization | Dividend yield |
| Century Textiles | 103.73 | 46.25 | 26471.85 | 0.21% |
| JK Paper | 9.09 | 9.47 | 10214.15 | 1.30% |
| West Coast Paper | 7.05 | 6.43 | 4867.83 | 1.06% |
| Andhra Paper | 7.3 | 10.65 | 2466.13 | 2.05% |
| Seshasayee Paper | 8.71 | 8.88 | 2257.87 | 1.37% |
| T N Newsprint | 9.56 | 7.71 | 1993.25 | 1.35% |
| Kuantum Papers | 7.8 | 6.85 | 1429.83 | 1.83% |
| Satia Industries | 6.4 | 8.03 | 1354.5 | 0.72% |
| Orient Paper | 204.01 | 13.34 | 1270.75 | 1.66% |
| Pudumjee Paper | 11.75 | 8.36 | 1152.72 | 0.42% |
| Pakka | 21.17 | 11.85 | 1030.71 | 0.94% |
Market capitalisation provides a sense of the size and market value of the company. Century Textiles, with a market capitalisation of Rs 26,471.85 crores, is the largest among the listed paper stocks. JK Paper and West Coast Paper follow, with market caps of Rs 10,214.15 crores and Rs 4,867.83 crores, respectively. Smaller companies like Pudumjee Paper and Pakka have market caps around Rs 1,000 crores, indicating potential growth opportunities in the sector.
The top five dividend yielders among paper stocks are Andhra Paper (2.05%), Kuantum Papers (1.83%), Orient Paper (1.66%), Seshasayee Paper (1.37%), and T N Newsprint (1.35%). These companies offer attractive returns to investors seeking income along with capital appreciation.
| Name | Sales growth 3Years | Profit growth 3Years | NPM growth | Cashflow growth | Debt |
| Century Textiles | 19.93% | 117.87% | 82.93% | -216.4% | 138.59% |
| JK Paper | 34.27% | 71.11% | -9.13% | -21.9% | -19.43% |
| West Coast Paper | 25.60% | 495.50% | -21.05% | -38.2% | -59.11% |
| Andhra Paper | 26.63% | 336.69% | -25.97% | -40.5% | 159.03% |
| Seshasayee Paper | 32.08% | 37.27% | -22.41% | -38.4% | 169.23% |
| T N Newsprint | 19.24% | 64.91% | -41.04% | -48.1% | -34.10% |
| Kuantum Papers | 44.21% | 258.52% | 11.45% | -20.7% | -22.23% |
| Satia Industries | 43.08% | 62.33% | 20.18% | 28.4% | -7.45% |
| Orient Paper | 23.34% | 28.74% | -92.11% | 63.6% | 263.76% |
| Pudumjee Paper | 21.57% | 25.63% | 66.89% | 707.8% | -66.39% |
| Pakka | 30.14% | 42.50% | -5.20% | -2.3% | 93.80% |
Over the past three years, all listed paper stocks have shown robust sales growth, with double-digit increases. The top performers in sales growth are Kuantum Papers (44.21%), Satia Industries (43.08%), Andhra Paper (26.63%), West Coast Paper (25.60%), and Orient Paper (23.34%).
In terms of profit growth, West Coast Paper leads with an astounding 495.50% increase, followed by Andhra Paper (336.69%), Kuantum Papers (258.52%), Century Textiles (117.87%), and JK Paper (71.11%).
Net Profit Margin (NPM) growth reflects the company’s efficiency in converting sales into actual profit. Positive NPM growth indicates improved profitability. The top five companies in NPM growth are Pudumjee Paper (66.89%), Satia Industries (20.18%), Kuantum Papers (11.45%), Century Textiles (82.93%), and Andhra Paper (-25.97%), despite the negative growth indicating a potential turnaround.
Cash flow growth is critical for assessing a company’s financial health. Notable cash flow growth was observed in Pudumjee Paper (707.8%), Orient Paper (63.6%), and Satia Industries (28.4%). Companies like West Coast Paper, JK Paper, and T N Newsprint have shown significant debt reduction, indicating improved financial stability.
| Name | Return over 1year | Return on equity | Return on assets |
| Century Textiles | 165.91% | 6.49% | 3.22% |
| JK Paper | 68.03% | 24.64% | 12.42% |
| West Coast Paper | 37.82% | 23.78% | 16.92% |
| Andhra Paper | 41.11% | 19.55% | 15.25% |
| Seshasayee Paper | 20.37% | 15.20% | 11.96% |
| T N Newsprint | 30.64% | 10.32% | 3.42% |
| Kuantum Papers | -20.00% | 17.59% | 10.28% |
| Satia Industries | 11.32% | 25.36% | 15.21% |
| Orient Paper | 34.61% | 0.40% | 0.27% |
| Pudumjee Paper | 182.66% | 22.07% | 14.64% |
| Pakka | 126.39% | 20.36% | 10.87% |
Return on Equity (ROE), Return on Assets (ROA), and return over one year are crucial indicators of a company’s financial performance. Century Textiles has demonstrated remarkable one-year returns of 165.91%, while Pudumjee Paper and Pakka have delivered returns of 182.66% and 126.39%, respectively. Satia Industries boasts the highest ROE at 25.36%, with JK Paper and West Coast Paper showing strong ROE of 24.64% and 23.78%, respectively. In terms of ROA, West Coast Paper leads with 16.92%, followed by Andhra Paper (15.25%) and Satia Industries (15.21%).
Conclusion
After examining the various financial metrics, it is evident that certain paper stocks stand out as potential contenders of watchlist. West Coast Paper, with its impressive profit growth and debt reduction, appears promising. JK Paper shows strong returns and a healthy dividend yield, making it attractive for income-seeking investors. Kuantum Papers’ significant sales growth and profit margins highlight its potential. Satia Industries, with robust ROE and cash flow growth, presents a solid investment case. Lastly, Pudumjee Paper’s outstanding one-year returns and NPM growth make it a compelling choice.
These stocks are poised for potential growth and offer a blend of income and capital appreciation, making them worthy additions to any investor’s watchlist.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.
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