*MKTCAP=1YEAR EBIDTA*

_Cheapest Paper Stock_

SHREE RAJESHWARANAND PAPER MILLS (516086)

*SRPML had EBIDTA of 18.71cr for FY17 and current mktcap is 18.76cr*. Rarely investors will get profit making co at 1 year Ebidta mktcap. STOCK IS ALSO TRADING ONLY  @ 15% OF ITS ANNUAL SALES

Gujarat based SRPML us engaged in production of Newsprint with installed capacity of 47000 tons. Last year, co also diversified into manufacturing of Abrasive Tools.
 
                 FY17 Rs/Cr

Sales.          125.40

EBIDTA.         18.71

Interest            9.02

Depreciation.  6.72

PBT.                  2.97

PAT.                   1.93

Equity.              12.45

*CashProfit.     8.65*

EPSRs.              1.55

*CashEPS.        6.95*

FY17 witnessed sharp improvement in its financials with PAT of 1.93cr Vs 60 Lacs YoY. During the year, Abrasive accounted for 13.60% of total sales. Co had been expanding paper capacity through internal accruals/Borrowings. In 4 years, it's topline had nearly doubled to 125 Cr from 65cr (consequently Finance cost rose from 3.54cr to 9cr). Benefits of such capex will be felt in coming years

Current Performance:

SRPML for Q1 has reported Sales of 25.80cr and NP of 50 Lacs *Vs loss of 32lacs YoY*

For FY18, SRPML can report Sales of 135 Cr and NP of 3.50-4cr with CASH PROFIT OF 10CR
Co is planning capex on balancing equipments to further increase production capacity and writing paper production

Stock is Undervalued as Tdg at 1xEBIDTA. With FY18EEPS of 3 and CASHEPS of 8.50, SRPML share price can DOUBLE in 1 year. If held for LONG term, stock price can be in 3 digits as in due course Abrasive division will also turn profitable
BUYING STRONGLY RECOMMENDED