The management believes that coated paper prices have already started firming up while uncoated paper prices especially in India will see further correction. Paper prices are directly dependent on pulp prices. Though pulp prices have started firming up globally, its subsequent effect in Paper prices will be seen in the coming quarters which should affect the company positively.
Rayon grade pulp prices have started improving on account of revival of demand from the textile industry. The company has a 3 months order from its biggest buyer – Grasim and the plant is already running at full capacity.
The capex expected for the next 2 years will be to the tune of USD 145 mn which the company will raise through internal accruals. Though they have no plans of raising any further debt, equity dilution route at BPH levels may be considered for the same.
The company has a total debt of $ 565 mn due to their Netherland SPV and Rs 8 bn in India which includes an FCCB of Rs 2.5 bn. Repayment for this is expected to begin in March 2011.
Outlook on domestic demand supply scenario remains favourable.
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