Genus Paper And Boards reports a net profit of Rs. 4.81 crores.

Genus Paper And Boards reports a net profit of Rs. 4.81 crores.

Genus paper and boards reported a consolidated net profit of Rs. 4.81 crores in the June quarter as against Rs. 3 crores in June 2021. The total revenue stood at Rs 179 crore, a YOY growth of 195%. During this period, the company incurred a total expense of Rs. 172 crores. The EBITDA for the company was at Rs. 6.35 crore as compared to Rs. 4.19 crore in June 2021. The Kraft paper segment contributed to a total revenue of Rs. 157 crores, while the Coke business generated revenue of Rs. 21 crores. The company incurred a finance cost of Rs. 2 crores.

Muzaffarnagar unit to boost profitability.

The company has successfully commenced production of duplex paper from one of the production lines at a new unit in Muzaffarnagar, Uttar Pradesh. The Muzaffarnagar unit has manufacturing facilities for the production of kraft paper and duplex paper. Genus Paper & Boards’ EPS has grown by 28% each year, compounded over three years. If growth like this continues, then shareholders will have plenty to smile about. One way to double-check a company’s growth is to look at how its revenue and earnings before interest and tax (EBIT) margins are changing.

The good news for Genus Paper & Boards shareholders is that EBIT margins have grown from 3.9% to 7.1% in the last 12 months and revenues are on an upward trend as well. Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in Genus Paper & Boards’ continuing strength. Fast growth and confident insiders should be enough to warrant further research, so it would seem that it’s a good stock to follow.

The paper industry in India is growing steadily with increasing demand from various segments like education, business & corporate and commercial printing. The demand and growth drivers have come from a combination of factors such as rising income levels, growing per capita expenditure, rapid urbanization, industrial production, government spending on education, and increased school enrollments. Higher disposable income, coupled with urbanization, is expected to drive new and different consumer behaviours for paper products.

Valuations:
The EPS was at Rs. 0.19 in the June quarter. The stock is trading at a PE ratio of 15.6x. The EBITDA was at 10.3x. The company has a low-interest coverage ratio of 5.39x. The stock was trading at Rs. 16.8 on September 6th, down by 0.30%.