Bonus Shares Alert: This Paper Stock to Trade Ex-Bonus Soon

Paper stocks have shown a smart recovery post the pandemic. Shares of major paper manufacturers in India have surged over 100% since the onset of the war in Ukraine.

This rise in paper stocks was on the back of robust demand triggered by the ban on plastic, supply chain constraints, and lifting of Covid restrictions.

As the demand for paper hit the roof, paper stocks saw a multifold rise in revenues. In turn, they rewarded shareholders with bonus issues and dividends.

Ruchira Papers is one among them to treat shareholders with bonus shares.

Here is all you need to know about the company's bonus issue.

• Ruchira Papers announced bonus shares on 8 August 2022.
• The company will issue bonus shares in a ratio of 1:10. This means one bonus share for every ten existing shares.
• The company will issue a total of 2,713,181 equity shares of Rs 10 each amounting to Rs 27,131,810.
• The record for the same is 10 October 2022.

This is the first time this smallcap is doing bonus issues. It has planned to diversify its business over the coming years.

The company is looking to diversify into writing and printing papers. Due to the growing awareness about paper quality among consumers, it's also looking to deliver international quality products.

The smallcap's expansion in the green field will be on the back of environmentally friendly technologies. It manufactures paper only from agricultural waste and wastepaper with the lowest carbon footprint.

The company, to support 'green matters', has started a conventional chemical recovery plant to recycle all the black liquor generated from the cooking of raw materials.

A look at the financials

For the June 2022 quarter, the company's revenue was up 58.2% YoY to Rs 1.9 bn from Rs 1.3 bn in the same quarter last year.

Net profit saw an increase of 157.5% YoY and came in at Rs 110 m from Rs 45 m from the June 2021 quarter.

This was on the back of multiple price hikes in the last few months amid the rise in the input costs.

Over the last five years, Ruchira Paper's revenue has grown at a CAGR of 8%, while net profit has grown at a 1% CAGR.

The growth over the years was due to the massive shift to online shopping. This has boosted the demand for packing boxes and paper bags. Also, the recent plastic ban tailwind has added to the growth.

Ruchira Papers Financial Snapshot - 5 years

Particulars	2017-2018	2018-19	2019-20	2020-21	2021-22
Total Revenue (Rs in m)	4,483	4,959	4,826	4,167	6,128
Growth (%)	22	40.3	-4.1	-21.2	60.6
Operating profit (Rs in m)	637	245	440	821	742
Operating profit margin (%)	16.5	16.7	9.2	5.9	10.4
Net profit (Rs in m)	380	402	274	50	330
Net profit margin (%)	8.5	8.2	5.69	1.2	5.4

Data Source- Equitymaster

How shares of Ruchira Papers have performed recently

Ruchira Paper's share price is down 10.9% in the past month. However, so far in 2022, the shares are trading higher by 69.6%.

The stock touched its 52-week high of Rs 168.9 on 26 August 2022. Its 52-week low was Rs 69.7 on 24 February 2022.

Ruchira Papers is currently trading at a PE (price to earnings) multiple of 9.07 times. The company is undervalued on the PE front. The industry PE multiple stands at 12.1x.

About Ruchira Papers

Ruchira papers is in the business of manufacturing of craft, writing, and printing paper.

The company's product range includes kraft paper, with an installed capacity of 52,800 tons per annum.

It also manufactures a special grade of kraft paper known as draw texture yarn (DTY)/ partial/pre-oriented yarn (POY) grade. It's for manufacturing textile tubes and wrapping different types of yarn.

The special feature of its kraft paper is load bearing capacity & tensile strength, which makes it most suitable for corrugated packing applications.

Ruchira papers is actively involved in integrating earth-friendly practices at every stage of the production cycle.

To know more, check out, Ruchira Paper's factsheet and its latest quarterly results.

As stocks from the paper sector interest you, check the latest Paper sector results.

You can also compare Ruchira Papers with its peers.

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