PAPER PRODUCTS LIMITED - BUY

FMCG Companies are evergreen favourites of Investors .It is mainly because of their ever growing business backed by strong brands ,wide market reach and good cash flow ..etc.But in many cases FMCG companies always commanding premium valuations and ruling at high P/E multiples .Proxies of FMCG companies are another better option to benefit from the growth of FMCG companies .Paper products is one such company  which supplying packaging materials for many of the top brands in India.PPL is a subsidiary of Finland based Huhtamaki Packaging Worldwide which is operating in more than 30 countries and one of the largest 10 packaging solution providors in the globe.Huhtamaki holding about 61 % stake in PPL through its holding company Huhtavefa BV.In India ,company commanding about 60 % of market share in premium flexible packaging  business and its client list includes all major players in FMCG sector like Britannia, Cadbury, Castrol, Coca-Cola, Dabur, Emami, Eveready, GSK, Godrej, Hindustan Unilever, ITC, Marico, Nestle, Pepsi, Perfetti, P&G, Tata Tea, TTK-LIG and Wipro..etc  In fact ,It is a one stop shop for FMCG companies for packaging needs and its products includes  Flexible Packaging, Specialized Cartons, Packaging Machines, Holographic Options, Gravure Cylinders, Polyethylene Films and Coated Materials, Shrink Sleeves, Heat Transfer Labels, Pressure Sensitive Labels, Metalized Paper and Wrap Around Labels ..etc.  In many sub sectors of FMCG , flexible packaging is  replacing conventional rigid or glass based packaging.Growing trend of processed food market and penetration of un tapped rural markets by personal care companies are expected to increase the use of flexible packaging going forward. Supported by one of the world leader as its parent, PPl will be the biggest beneficiary of this changing trend in India. Company  showing steady growth in the past and  distributing dividend in every year. In FY 2012-13 PPL reported a top line of Rs.900 Cr ,net profit of Rs.45 Cr and an EPS of Rs.7.20 . Company’s stock price is now trading around its 52 week low price .For the past few weeks PPL’s Indian promoter is continuously buying shares from open market.I think,this MNC stock is a good proxy to participate in  the  Indian consumption story without taking higher level of risk @ CMP Rs.61.

Link to Parent Company's website HERE  

Link to PPL website HERE