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Check Before You Invest : West Coast Paper Mills Ltd

BSE: 500444 NSE: WSTCSTPAPR ISIN: INE976A01021
  |   Sector:  Paper & Stationary   |   Industry:  Paper & Paper Products

Snapshot

Q.1 Which industry/sub-sector does West Coast Paper Mills Ltd belong to?
West Coast Paper Mills Ltd belongs to the Paper & Stationary sector, operating specifically within the Paper & Paper Products segment.
Q.2 Is West Coast Paper Mills Ltd a good quality company?
West Coast Paper Mills Ltd is a good quality company, based on a consistently good 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 West Coast Paper Mills Ltd undervalued or overvalued?
West Coast Paper Mills Ltd appears Somewhat 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 23.68 10.06
Price to Book 1.24 1.51
Price to Sales 1.43 1.31
EV to EBITDA 10.16 6.43
Q.4 Is West Coast Paper Mills Ltd a good buy now?
West Coast Paper Mills Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. 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 West Coast Paper Mills Ltd?
West Coast Paper Mills Ltd revenue growth is -4.3% for FY-2025, which is below its 5-year CAGR of 4.84%, indicating slower growth.

Q.2 Gross Profit margin of West Coast Paper Mills Ltd?
West Coast Paper Mills Ltd Gross profit margin which is the profit after deduction of direct costs, is 19.1% for FY-2025, which is in line with its 5-year median of 19.3%, indicating stable margins.

Q.3 Operating Profit Margin of West Coast Paper Mills Ltd?
West Coast Paper Mills Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 14.03% for FY-2025, which is below its 5-year median of 20.44% indicating decreasing margins.

Q.4 Net Profit Margin of West Coast Paper Mills Ltd?
West Coast Paper Mills Ltd Net Profit Margin is 11.34% for FY-2025, is in line with its 5-year median of 11.34%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 19.1 19.3
Operating Profit Margin (%) 14.03 20.44
Net Profit Margin (%) 11.34 11.34

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of West Coast Paper Mills Ltd?
West Coast Paper Mills Ltd Return on Asset is 8.62%, which is below its 5-year historical median of 9.34%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of West Coast Paper Mills Ltd?
West Coast Paper Mills Ltd Return on capital employed is 14.1% for FY-2025, which is below its 5-year historical median of 15.7%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of West Coast Paper Mills Ltd?
West Coast Paper Mills Ltd Return on equity is 10.99% for FY-2025, which is below its 5-year historical median of 15.58%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of West Coast Paper Mills Ltd?
West Coast Paper Mills Ltd Cash conversion cycle is 83 days, above its 5-year historical median of 60 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.76 0.85
ROE (%) 10.99 15.58
ROCE (%) 14.1 15.7
Cash Conversion Cycle 83 days 60 days

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

Q.9 Debt to Equity ratio of West Coast Paper Mills Ltd?
West Coast Paper Mills Ltd Debt-to-Equity ratio is 0.06, 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 West Coast Paper Mills Ltd?
West Coast Paper Mills Ltd Debt to cash flow from operations is 0.98, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of West Coast Paper Mills Ltd?

Q.1 Promoter shareholding and pledge status of West Coast Paper Mills Ltd?
Promoters hold 56.58% of the West Coast Paper Mills Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does West Coast Paper Mills Ltd performance compare with that of its Peers?

Q.1 Revenue growth of West Coast Paper Mills Ltd vs industry peers?
West Coast Paper Mills Ltd revenue CAGR is 4.84%, 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 (%) -4.3 5.3
Gross Profit Growth (%) -34.5 3.9
Operating Profit Growth (%) -46.7 0.8
Net Profit Growth (%) -40.1 1.4
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.76 0.91
ROE (%) 10.99 4.81
ROCE (%) 14.1 7.06
Cash Conversion Cycle (days) 82.96 47

Valuation & price assessment

Q.1 Stock return of West Coast Paper Mills Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 19.7% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
19.7% 20% -2.8% 24.1%
Q.2 Valuation ratios of West Coast Paper Mills Ltd vs historical?
The current P/E ratio of 23.68 is higher than its historical median of 10.06, indicating that the stock is trading above 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 23.68 10.06 11.02
Price to Book 1.24 1.51 0.91
Price to Sales 1.43 1.31 0.72
EV to EBITDA 10.16 6.43 6.12

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