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Check Before You Invest : Shree Rama Newsprint Ltd

BSE: 500356 NSE: RAMANEWS ISIN: INE278B01020
  |   Sector:  Paper & Stationary   |   Industry:  Paper & Paper Products

Snapshot

Q.1 Which industry/sub-sector does Shree Rama Newsprint Ltd belong to?
Shree Rama Newsprint Ltd belongs to the Paper & Stationary sector, operating specifically within the Paper & Paper Products segment.
Q.2 Is Shree Rama Newsprint Ltd a good quality company?
Shree Rama Newsprint Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Shree Rama Newsprint Ltd undervalued or overvalued?
Shree Rama Newsprint Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings - -
Price to Book -11.24 1.01
Price to Sales 11.85 4.20
EV to EBITDA 80.18 75.56
Q.4 Is Shree Rama Newsprint Ltd a good buy now?
Shree Rama Newsprint Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Shree Rama Newsprint Ltd?
Shree Rama Newsprint Ltd revenue growth is -6.2% for FY-2025, which is above its 5-year CAGR of -33.39%, indicating faster growth.

Q.2 Gross Profit margin of Shree Rama Newsprint Ltd?
Shree Rama Newsprint Ltd Gross profit margin which is the profit after deduction of direct costs, is -55.4% for FY-2025, which is below its 5-year median of -18.9%, indicating decreasing margins.

Q.3 Operating Profit Margin of Shree Rama Newsprint Ltd?
Shree Rama Newsprint Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 15.9% for FY-2025, which is above its 5-year median of 9.84% indicating increasing margins.

Q.4 Net Profit Margin of Shree Rama Newsprint Ltd?
Shree Rama Newsprint Ltd Net Profit Margin is -64.84% for FY-2025, is below its 5-year median of -29.06%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -55.4 -18.9
Operating Profit Margin (%) 15.9 9.84
Net Profit Margin (%) -64.84 -29.06

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Shree Rama Newsprint Ltd?
Shree Rama Newsprint Ltd Return on Asset is -5.13%, which is in line with its 5-year historical median of -5.13%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Shree Rama Newsprint Ltd?
Shree Rama Newsprint Ltd Return on capital employed is 1.87% for FY-2025, which is above its 5-year historical median of 0.31%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Shree Rama Newsprint Ltd?
Shree Rama Newsprint Ltd Return on equity is -73.29% for FY-2025, which is below its 5-year historical median of -20.99%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Shree Rama Newsprint Ltd?
Shree Rama Newsprint Ltd Cash conversion cycle is 29 days, below its 5-year historical median of 67 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.08 0.08
ROE (%) -73.29 -20.99
ROCE (%) 1.87 0.31
Cash Conversion Cycle 29 days 67 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Shree Rama Newsprint Ltd?
Shree Rama Newsprint Ltd Debt-to-Equity ratio is -25.59, which is lower the industry average of 0.48, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Shree Rama Newsprint Ltd?
Shree Rama Newsprint Ltd Debt to cash flow from operations is 39.33, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Shree Rama Newsprint Ltd?

Q.1 Promoter shareholding and pledge status of Shree Rama Newsprint Ltd?
Promoters hold 74.76% of the Shree Rama Newsprint Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Shree Rama Newsprint Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Shree Rama Newsprint Ltd vs industry peers?
Shree Rama Newsprint Ltd revenue CAGR is -33.39%, compared to the industry median CAGR of 5.29%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -6.2 5.3
Gross Profit Growth (%) 0 3.9
Operating Profit Growth (%) - 0.8
Net Profit Growth (%) 0 1.4
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.08 0.91
ROE (%) -73.29 4.81
ROCE (%) 1.87 7.06
Cash Conversion Cycle (days) 29.36 47

Valuation & price assessment

Q.1 Stock return of Shree Rama Newsprint Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 2.9% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
2.9% 11.8% 31% -27.7%
Q.2 Valuation ratios of Shree Rama Newsprint Ltd vs historical?
The current P/E ratio of 0 is in line with than its historical median of , indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings - - 11.02
Price to Book -11.24 1.01 0.91
Price to Sales 11.85 4.20 0.72
EV to EBITDA 80.18 75.56 6.12

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