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Orient Paper Industries

April 23, 2008

The turnover in Orient’s ‘fans’ business, at Rs1.3bn, grew 27% yoy during 4Q08, followed by cement at 16%. Paper however slipped 18% yoy due to a 10-day unprecedented shutdown. Total turnover for the quarter, at Rs3.8bn, beat our estimates by 4%. Cement aggregate volumes, at 0.65m tons, inched up 2% yoy. Net realizations, at ~Rs2,950 a ton, rose 13% yoy (and 3% qoq).

The company made a provision of Rs 125m for receivables from its Kenya JV, Pan Paper. Adjusting for this, operating profit, at Rs982m, crossed our estimate of Rs 946m. A temporary shutdown at the paper plant reduced its profitability to Rs35m (Rs104m yoy, Rs111m qoq). This led to an overall dip in the OPM yoy and qoq.

However, the company is expected to report no growth in EPS for FY09 and is likely to be Rs 11.

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