SUMMER PROJECT

PROGRESS REPORT NO. 1

ON

MARKET (SECTOR) ANALYSIS OF BALLARPUR

INDUSTRIES

SUBMITTED TO: SUBMITTED BY:

Name: STUDENT NAME: Shravan Chauhan

Designation: UID: 18BBA1118
Chandigarh University Batch 2018-21
Location: Gharyan, Mohali
 About BALLARPUR INDUSTRIES

Ballarpur Industries Limited (BILT) is a subsidiary of Avantha Group, and India's largest manufacturer of

writing and printing (W&P) paper. The current chairman of the company is Gautam Thapar, who succeeded

his late uncle L.M. Thapar. Lala Karam Chand Thapar established company in 1945 as Ballarpur Paper and

Straw Board Mills Limited, with 'Three Aces' (paper) and 'Wisdom' (stationery) being its first two brands. In

1969 Shree Gopal Paper Mills Limited in Yamunanagar was merged with the company. In 1975, the

organization was renamed Ballarpur Industries Limited.

In the 1990s the company was under siege from Southeast Asian companies, who set up greenfield projects

in India. But in 2001, Ballarpur Industries turned around and was able to buy out its Indonesian competitor's

Sinar Mas Group Indian division and entered into a partnership with Red Roses Publications, Norway.

The name BILT emerged after a corporate rebranding exercise in 2002. Today, it is a well-established name,

associated with not just paper, but also stationery products.

BILT is headquartered in Gurgaon in Haryana.

Its 3 central nurseries are in:

 Maharashtra

 Orissa

 Telangana
 MARKET ANALYSIS

Definition of Market Analysis-

Market analysis is a large part of market research and an important component of a business plan. In this

plan, business founders document their business idea in writing. During the course of the market analysis, a

specific market is taken into account. With the help of the results displayed, companies can identify the

opportunities and risks of that particular market. The target group forms the basis of the market analysis.

In order to carry out a market analysis you will require reliable information, small companies tend to carry

out the necessary research for their market analysis themselves. Larger companies, on the other hand, often

commission market research institutes to do it for them. A market analysis can be carried out using various

methods of data collection.

In this project report on Ballarpur Industries we will be conducting our study on the basis of the secondary

data that we will get from various online sources.

Market Analysis of Ballarpur Industries-

1. Ballarpur Industries share holdings.

Ballarpur Industries Ltd Share Holding as on 31-03-2020

No. of
Category shares Percentage
Promoters 312,057,058 24.13
Foreign Institutions 48,421,023 3.74
NBFC and Mutual
Funds 13,779 0.00
Central Government 1,500 0.00
Others 110,522,945 8.54
General Public 391,524,110 30.27
Financial Institutions 429,718,033 33.22
Foreign Promoters 1,197,308 0.09
Ballarpur Industries Ltd., incorporated in the year 1945, is a Small Cap company (having a market cap of

Rs 109.94 Crore) operating in Paper sector.

Ballarpur Industries Ltd. key Products/Revenue Segments include Paper which contributed Rs 299.26 Crore

to Sales Value (97.32 % of Total Sales), Scrap which contributed Rs 4.22 Crore to Sales Value (1.37 % of

Total Sales) and Others which contributed Rs 4.00 Crore to Sales Value (1.30 % of Total Sales)for the year

ending 31-Mar-2018.

For the quarter ended 31-12-2019, the company has reported a Consolidated sale of Rs 816.81 Crore, down

-1.16 % from last quarter Sales of Rs 826.39 Crore and down -14.48 % from last year same quarter Sales of

Rs 955.13 Crore Company has reported net profit after tax of Rs -766.12 Crore in latest quarter.

2. Ballarpur Industries MARKET CAPITAL.

PEER COMPARISION

(On the basis of market capital)

Company Name Market Sales Net Profit
Cap Qtr Qtr

Ballarpur Ind 86.66 449.58 -635.51

JK Paper 1713.81 3,054.30 492.71

Seshasayee Pape 1158.56 1,183.98 174.60

West Coast Pap 1023.76 1,979.51 296.06

Andhra Paper 882.89 1,269.70 212.92

3. Ballarpur Industries key fundamentals

Ballarpur Inds.'s Key Fundamentals

Parameter Values

Market Cap (in ₹ Cr.) 109.94

Earnings Per Share (EPS TTM) (₹) -4.91

Price to Earnings (P/E) Ratio -0.17

Book Value Per Share (₹) 6.06

4. Industry growth of BALLARPUR INDUSTRIES

Investors Who Bought Ballarpur Industries (NSE:BALLARPUR) Shares Three Years Ago Are Now

Down 85%

 (April 24, 2019)

Every investor on earth makes bad calls sometimes. But you have a problem if you face massive losses more

than once in a while. So, consider for a moment, the misfortune of Ballarpur Industries Limited investors

who have held the stock for three years as it declined a whopping 85%. That’d be enough to cause even the

strongest minds some disquiet. And over the last year the share price fell 81%, so we doubt many

shareholders are delighted. Shareholders have had an even rougher run lately, with the share price down

37% in the last 90 days.

Ballarpur Industries became profitable within the last five years. That would generally be considered a

positive, so we are surprised to see the share price is down. So given the share price is down it’s worth

checking some other metrics too. The revenue decline over three years, at a rate of 16% per year, probably had

some shareholders looking to sell. After all, if revenue keeps shrinking, it may be difficult to find earnings growth

in the future.
While the broader market lost about 1.3% in the twelve months, Ballarpur Industries shareholders did even

worse, losing 81%. Having said that, it’s inevitable that some stocks will be oversold in a falling market. The

key is to keep your eyes on the fundamental developments. Unfortunately, last year’s performance may

indicate unresolved challenges, given that it was worse than the annualized loss of 29% over the last half

decade. Generally speaking, long term share price weakness can be a bad sign, though contrarian investors

might want to research the stock in hope of a turnaround.

 SHARE PRICE of Ballarpur Industries over the years-

Company 1W % 1M % 1 QTR % 1 YR % 3 YR % 5 YR %

Ballarpur Inds. 54.55 88.89 112.50 -59.52 -95.20 -93.36

 GROWTH PERCENTAGE of Ballarpur Industries over the years-

Growth (%) Quarterly Annual (TTM)

Particulars QoQ YoY 1-Year 3-Years 5-Years

Revenue -1.16 -14.48 -1.44 5.49 -7.57

Operating Profit -6.76 -33.69 -3.39 63.65 -6.20

Net Profit -914.33 -402.24 -1.83 -2.23 -290.93

EPS -642.08 -326.28 -30.20 10.87 -278.70

Book Value -- -- -334.62 -150.81 --

Ballarpur Industries, Rainbow Papers, Tamil Nadu Newsprint & Paper and JK Paper had fallen 44% 10%,

10% and 22%, respectively, this year till October 25. Among the big paper companies, Andhra Pradesh

Paper Mills is the only one to have given some returns; it rose 4.5% to Rs 288.30 during the period.

One reason for the stress in the sector is the rising cost of raw materials such as pulp and coal. Global wood

pulp prices rose 15% from $720 per ton (Wood Pulp Sweden) in October 2012 to $830 per ton in September

2013. In India, rupee fall further pushed up prices. This year, the rupee has fallen 10.84%; it was at 61.50 on
October 28 as against 54.83 on January 1.

Paper consumption in India has been below its potential. While India hosts 17% of the world’s population, it

accounts for only about 3% of global production of paper and paperboard. This gap between potential and

actual demand is best seen in the per capita numbers. India’s per capita consumption of paper is estimated at

barely 13 kg compared to 78 kg in China, 158 kg each in the European Union, Korea, Taiwan, Hong Kong,

Singapore and Malaysia, 218 kg in Japan, and 224 kg in North America. The global average itself is 56 kg.

This gap between potential and actual demand in India has led to significant pent up demand over the last

decade — driven by rising levels of literacy, improving well-being of the people and surging aspiration

levels. Thus, despite its low base, India is the fastest growing market for paper

Demand for paper has been growing at around 8% per year for some time. According to industry estimates,

the domestic market for consumption of paper is over 17 million

metric tons per annum (MTPA), with over 2 million MTPA being imported. By 2024-25, under the baseline

scenario, domestic consumption is projected to rise to 23.5 million MTPA; and in the optimistic scenario,

consumption is expected to rise to 36.9 million MTPA. What this means is that about 1 million MTPA of

integrated pulp, paper and paperboard capacity has to be created in India on an annual basis over the current

capacity to domestically meet the growing demand.

Increasing cost of raw material and energy have resulted in a substantial increase in the cost of domestic

manufacture of paper and paperboard. Such input price pressures, coupled with relatively high cost of

capital, have opened the Indian market to growing imports — leading to underutilization of the existing

domestic production capacity. Imports of paper, paperboard and newsprint into India have been steadily

increasing. Imports have risen in terms of volume, from 1.8 million MT in 2010-11 to 3.08 million MT in

2017-18.