Stock Review: BILT

BILT is the largest paper company in India. A part of the Avantha group, it is the only Indian firm to feature in the list of top 100 paper companies of the world. It is the market leader in coated paper segment in India. Its margins in paper business were hit by rising cost of pulp, power and fuel. The company has raised product prices to offset rise in input cost. It has a capex plan of 1,300 crore to increase pulp capacity and lower dependence on imports by fiscal 2012-13. However, high pulp prices will continue to weigh on the company's margins in the near term. The company is planning to list its international subsidiary on the London Stock Exchange. The proceeds from listing will help fund its expansion and improve profitability. The paper industry is likely to consolidate in the near term and BILT, being the largest firm in the sector, will benefit. Long-term investors can look at accumulating the stock at lower levels.