Tamilnadu Newsprint - Benefits of low-cost producer - Emkay

- TNPL's low cost advantage due to use of bagasse as raw material supports its 300-500bps higher EBIDTA margins over the industry average.

- Recently commissioned de-inking pulp facility will further boost its cost efficiency and reduce the dependency on imported pulp

- Company has further chalked down greenfield capex plan of Rs 12bn to put capacity of packaging board which is expected to be completed by the end of FY16.

- TNPL remains our top pick due to its distinct cost advantage and compelling valuations at EV/EBIDTA of 3x, 40% discount to book value with 5% dividend yield.

Source : Equity Bulls

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