Ballarpur Industries Results

Ballarpur Industries (BILT) Q4FY08 and FY08 results were in line with expectations. 540 bps decline in EBITDA margins to 21.8% due to revenues from low margin timber sales and cost pressure at BPH due to rising fuel and pulp prices. BUY Company has recently taken price increase of ~10% in coated paper and ~5% in uncoated paper which is likely to improve EBITDA margins by ~150 bps to 26.5% by FY09E as per guidance given by the management.

FY08 net sales increased by 22.1% to Rs 28.3 bn and net profit increased by 17.2% to Rs 3 bn resulting in an EPS of Rs 4.8.

It’s expansion plan at unit Bhigwan to increase paper capacity by 190 thousand mtpa is expected to finish by Nov’08 and at unit Ballarpur to increase paper capacity by 155 thousand mtpa to complete by June’09. This is likely to result in volume growth of ~12%. For FY09 EPS growth is expected to be flat between Rs 4.6 to Rs 4.8