The West Coast Paper Mills
Current market price: Rs 90,
Fair value: Rs 97

Crisil Equities assigned fundamental grade of 3/5 to The West Coast Paper Mills (West Coast) indicating Rs good' fundamentals. The company has recently expanded capacities to 3.15 lakh tonnes per annum making it the fifth largest paper manufacturer in India. Replacement of its old fibreline, as part of its expansion plan, is expected to improve West Coast's operating efficiency and margins. Crisil Equities expects West Coast's revenues to grow at a two-year CAGR of 37 per cent to Rs 1,170 crore in FY12, while EPS is expected to increase to Rs 15.5 in FY12 from Rs 8.8 in FY10. It has assigned a price earnings of 6x to FY12 EPS of Rs 15.5 and has valued West Coast's 36 per cent stake in Rama Newsprint at Rs 4 per share.

— Crisil Equities

Also Read   Related Stories News Now - Tata Steel: Fit for the future - Global slowdown woes return - Metal shares shine on BSE; Tata Steel gains over 3% - Markets recover from day's lows - Tata Steel jumps nearly 4% on BSE - Steel prices rise by Rs 1,000 a tonne next month

Also Read   Related Stories News Now - Markets end flat, weakening rupee weighs - UK regulator decision to fine NRI financial advisers upheld - 30 striking AI pilots sacked, two return to work - Speciality Restaurants sets IPO price at Rs 150 per share - Shriram EPC bags Rs 165 cr contract in Kerala More

Corus and Thailand's Sahaviriya Steel Industries (SSI) have entered into an MoU for potential sale of Teesside Cast Products (TCP) in UK. The transaction is valued at around $500 million. Since, TCP has a production capacity of 3.9 mtpa, this implies a valuation of $128/t. Besides, the Redcar Blast Furnace and Lackenby steelmaking facilities, the assets sold include Redcar and South Bank coke ovens, power generation facilities and a sinter plant. The reduced sales volume (of slabs) on account of TCP mothballing had also been factored. The cash inflows of $500m add around Rs25 per share to the intrinsic value of the stock. The stock is trading at 5.4x EV/Ebitda and 7.8x P/adj EPS, both on FY12E basis. Maintain buy .

—Ambit Capital

New Ipad Application :Business Standard's all new IPad App Click here to download for free Other Stories      - Markets end flat, weakening rupee weighs - UK regulator decision to fine NRI financial advisers upheld - 30 striking AI pilots sacked, two return to work - Speciality Restaurants sets IPO price at Rs 150 per share - Shriram EPC bags Rs 165 cr contract in Kerala

Tags : The West Coast Paper Mills | Tata Steel | Corus | Thailand's Sahaviriya Steel Industries | Teesside Cast |   Read Business news in  Advertisements -  Benefits Upto Rs. 2.36 Lakhs on the Fully Loaded TJet Petrol. -  Journey on, We are by Your Side. Click here to know more -  The Best Seller is Also the No. 1 in Mileage. Click here -  2 Lac Apartments, 1 Lac House / Plots. Click here -  One Partnership Endless Possibilities. Click here to know more -  A Brand New Server at a Price That Fits Your Budget. Click here -  Benefits Upto Rs. 2.36 Lakhs on the Fully Loaded TJet Petrol. -  Watch The Film Here. Click here to know more.. -  Leader in Passenger Car & Automobile Tyres. Click here -  1 billion in saving for Unilever without any tangles. -  Learn How One City is Running on FOOD SCRAPS. -  Helping doctors detect diseases earlier, saving costs & extending lives. -  Which is the best plan for your daughter -  Check out the TRUE COLOURS of your Stocks, Now for FREE! -  One of the leading business schools in the world.Know More