Rainbow reported a strong current year performance with improved price realization and product mix. Our phase-1 expansion of 80,000 MTPA is yielding good result which is reflected in our performance during the current year.
Result Highlights:
Results for the year ended March 31, 2011
· Gross Sales are Rs. 402 crore for the year ended March 31, 2011; YoY growth over FY 2010 of 37%.
· EBITDA is Rs. 89 crore for current year; EBITDA margin is 23%.
· PAT is Rs. 37 crore for the year ended March 31, 2011; YoY growth of 57%
· Volumes up from 108,905 MT to 137,307 MT.
· Average Realisation increases from Rs. 25.4 per Kg to Rs. 28.1 per Kg.
Paper Industry in India:
Paper and paper industry are growing continuously at a very steady rate. The growth in the paper industry has mirrored the growth in GDP over the last few years.
India is one of the fastest growing market for paper globally. Paper consumption in India is poised for a big leap forward in synchronization with growth drivers like GDP growth rate, urbanization & changing demographics, increasing literacy rate and government’s thrust on literacy, service sector thrust, increasing consumerism and awareness towards environment.
Paper is a fully recyclable commodity and with increased awareness will slowly replace plastic. Many states & cities in India have started the green drive and are working towards banning plastic and encouraging the use of paper bags.
Indian Paper Manufacturers Association is expecting demand for paper to grow by 57 percent to 14 million tons by 2015 from current demand of 8.8 million tonne.
As per RISI Resource Information Systems Inc., Recovered paper will gain more share of the world's total fiber furnish over the next 15 years. Recovered paper consumption is forecasted to be about 400 million tons by 2025, compared with 206 million tons in 2009 and estimated 220 million tons in 2010.
Corporate Actions:
§ During the FY 2011 the shareholding of the Promoters/Promoter Group has increased from 24.76% to 29.76% through creeping acquisition route.
§ On 20th April 2011, the members of the company have approved for,
- The issuance of 40,00,000 Equity Shares to Promoters / Promoter Group, on preferential basis at a price of Rs. 60 per share (including premium of Rs 58)
- The issuance of 60,00,000 warrants (convertible into 60,00,000 equity shares, within a period of 18 months from the date of allotment of warrants) on preferential basis at a price of Rs. 60 per share (including premium of Rs 58).
§ The Promoter/Promoter Group has inducted share application money of Rs 24 crore. Post allotment, the shareholding of the Promoter/Promoter Group will increase to 32.84%
§ For the additional 60,00,000 warrants the 25% upfront money of Rs 9 crore is received by the company. Based on the current Capital Structure of the Company, post the conversion of warrants the Promoter/Promoter Group shareholding would increase to 36.99%.
Expansion of 122,000MTPA
· The project implementation is progressing well. Completion expected in Q2 FY 2012.
· The new plant will be used to manufacture value added products like Thermal, Non-carbon, Glazed, Light weight paper, Coated & Crepe paper.
· Post commissioning, we will be the sixth largest paper producer in India with 305,000 TPA of capacity.
· Terms of Reference received for the 20 MW Power Plant. Completion expected in Q3 FY 2012.
Wealth out of waste projects
· The Total revenue for FY 2011 is Rs 2.67 crore.
· Brick and Fly Ash project: The brick making machine with installed capacity of 20 million bricks per annum was commissioned in Dec. 2010.
· Plastic sheet project: The trial production of plastic sheet projects with a capacity of 180,000 sheets per annum has begun.
Launch of Consumer Products
· The Company is making its entry in value added Consumer Products segment by making of Notebooks, Copier papers and Office Stationary under “Rainbow” brand.
· Capex outlay is Rs. 25 crore will be funded by internal accruals.
· The Company is planning to penetrate, through building distributors network, in the states of Gujarat, Rajasthan and Maharashtra initially.
· Branding exercise to commence from Q2 FY 2012.
