The fifty four year old IPAPPM (formerly Andhra Pradesh Paper Mills) is an integrated paper and pulp manufacturer with a total production capacity of 241,000 TPA. The company produces a range of premium grade writing, printing, copier and industrial papers for domestic and export markets. Each of these products offers a differentiated proposition and is targeted to meet unique needs of discerning customers.

It employs around 1,900 people.

The company's Rajahmundry Mill plant is an integrated wood-based paper mill with a rated capacity to produce 174,000 MT of finished paper and 181,500 MT of bleached pulp annually. The unit manufactures uncoated writing and printing paper - mainly cut-sizes, industrial papers and posters using Casuarina, Eucalyptus and Subabul as main sources of pulp wood.

Kadiyam Mill plant has a rated capacity to produce 67,000 MT per annum of finished paper such as cream wove, azurelaid, colored cutsizes and kraft liner using recycled fiber and purchased pulp as base raw materials.

A 75% subsidiary of a strong American company

The Parent company, International Paper is a leading global producer of renewable fiber-based packaging, pulp and paper products with manufacturing operations in North America, Latin America, Europe, North Africa, India and Russia. It is the largest such company in the world.

It produces corrugated packaging products that protect and promote goods, and enable worldwide commerce; pulp for diapers, tissue and other personal hygiene products that promote health and wellness and papers that facilitate education and communication.

International Paper is headquartered in Memphis, Tennessee, USA, and employ approximately 52,000 colleagues located in more than 24 countries.

Net sales for 2017 were $22 billion or more than Rs 150000 crore.

The Parent company holds 75% stake in the Indian subsidiary.

During the quarter it registered a 15% rise in sales to Rs 376.180 crore. OPM improved 1190 basis points to 28.9% which saw OP rise 95% to Rs 108.80 crore. Other income jumped 170% to Rs 6.16 crore and interest fell 75% to Rs 1.64 crore. After providing for depreciation (up 1% to Rs 16.97 crore), PBT went up 178% to Rs 96.35 crore.

EO loss was Rs 5.43 crore against NIL. Thus PBT after EO grew 162% to Rs 90.93 crore.

Tax grew 136% to Rs 33.06 crore (tax incidence went down from 40.3% to 36.4%), after which PAT went up 179% to Rs 57.87 crore.

Nine months results

During the nine months it registered 14% rise in sales to Rs 1051.94 crore. OPM improved 1000 basis points to 25.6% which saw OP rise 87% to Rs 269.52 crore. Other income jumped 159% to Rs 11.76 crore and interest fell 61% to Rs 7.69 crore. After providing for depreciation (up 1% to Rs 49.60 crore), PBT went up 182% to Rs 223.99 crore.

EO loss was Rs 5.43 crore against NIL. Thus PBT after EO grew 175% to Rs 218.57 crore. EO loss is due to provision made towards interest demand arising Income Tax dispute.

Tax grew 169% to Rs 78.40 crore (tax incidence went down from 36.7% to 35.9%), after which PAT went up 178% to Rs 140.17 crore.

During the nine months the performance was impacted by planned annual outage as the production was lost for 10 days at its Rajahmundary plant.

Paper Industry is growing steadily

The Paper Industry in India is growing steadily with increasing demand from various customer 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.

To cater to the customer needs, IPAPPM offers the best and recyclable products and services using innovation, sustainability and manufacturing excellence programs. The company has been able to grow in most regions through distribution expansion and customer engagement programs.

Focuses on creating innovative, sustainable and recyclable products

IPAPPM manufactures a wide variety of writing, printing, copier and offers a wide range of high quality specialty grade products for a diverse range of applications for foreign and domestic markets.

These products are designed to provide outstanding performance, functional excellence and exceptional finish quality.

The well-known cut-size papers of the Company offer a wide range of office documentation and multipurpose papers, from economy to premium grades, ideal for both home and commercial use.

The papers are available in best-in-class brightness and produced with Elemental Chlorine Free (ECF) pulp technology.

In Writing and Printing it offers a wide range of superior quality writing and printing papers suitable for printing journals, text books, reference books, calendars and a variety of other commercial printing applications as well as for notebooks and diaries.

In copier, the papers are available in best in class brightness and produced with Elemental Chlorine Free (ECF) Pulp technology. Its range is perfect for high volume photocopying and high-quality color printing needs and engineered to run flawlessly on all types of Photocopiers, Laserjet and Inkjet printers and Multi functional devices.

In speciality papers, IPAPPM offers a wide range of superior quality Specialty grade products that are custom engineered to suit specific and diverse range of applications.

Valuation

The stock trades at Rs 428