West Coast Paper Mills Ltd. – Leading India’s Booming Paper Market

West Coast Paper has over 66 dealers as well as 6 Zonal Offices across the country and it exports to over 15 countries around the world.

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(A) About

West Coast Paper Mills Ltd is one of the oldest as well as the largest producers of paper for printing, writing, and packaging in India. Established in 1955, The company's first mill is located at Dandeli in Uttara Kannada district in Karnataka.

The Company's worldwide quality paper meets the needs of numerous industries in India. These include printing, writing, publishing, stationary, notebooks, and packaging, while also contributing to the country's development.

(B) Journey of West Coast Paper Mills

(C) Industry Landscape

  • The market size of Indian Paper and Paper Board Industry is $10.6 Billion, while the consumption of FY23 stood at 22.05 Million Tonnes and is also expected to reach 30 Million Tonnes at a growth rate 6%-7%.
  • The demand for for eco-friendly production methods in the paper industry as well as the use of recycled materials is increasing.
  • Carton Boxes and Container Boards(Corrugated Boards) account for 55%, followed by writing as well as printing paper at 25%. Further, Speciality Paper at 10% and newsprint paper at 10% of the sales of the Indian Paper Industry.
  • The consumer packaging segment is expected to grow at a CAGR of 9.5%. Further, Increased sales volumes of Household appliances, FMCG Products, Pharma and E-commerce driving the growth.

(D) Board Members of West Coast Paper Mills

(E) Shareholding Pattern of West Coast Paper Mills

Shareholding_West Coast Paper_PAWealth
Shareholding_West Coast Paper_PAWealth

(F) Business Segments

Paper and Paperboard

West Coast Paper Mills Ltd. is a prominent player in the Indian paper industry, producing the finest paper under the WESCO brand. Moreover, A complement of office stationery, premium printing products and value-added products helped the Company generate 93% revenue from this segment in FY23.

Optical Fibre Cables

The Company’s cables division manufactures optical fibre cables in a manufacturing facility in Mysuru, addressing the requirements of the Indian telecom and also the utilities sector. Also, The Company exports its Optical fibre cables to various countries in Europe and MEA region.

(G) Revenue Segments

segments_West Coast Paper_PAWealth

(H) Peer Comparison

Peers_West Coast Paper_PAWealth

(I) Cost Structure of West Coast Paper Mills

Costs_West Coast Paper_PAWealth

(J) Financials

Financials_West Coast Paper_PAWealth

The company's net sales have increased from Rs 1710.2 Cr. in FY18 to Rs 4920.76 Cr. in FY23 over the past 6 years at a CAGR of 19.26%. While, the company's PAT has grown from Rs 223.16 Cr. in FY18 to Rs 1087.01 Cr. in FY23 over the past 6 years at a CAGR of 21.89%. Further, The company's ROE has improved from 26.6% in FY18 to 42.17% in FY23. Additionally, The company's debt-to-equity has decreased from 0.4x in FY18 to 0.1x in FY23.

DuPont Analysis

Dupont_West Coast Paper_PAWealth

Terms of Trade

TermsofTrade_West Coast Paper_PAWealth

(K) Management Discussion


  • The company reported production growth of 6.11% to 314,919 tonnes in FY23 from 296,785 tonnes in FY22 for the Paper and Paper Boad Segment while the Optical Fibre Cable Segment witnessed a growth of 13.54 % to 72,246 kilometers in FY23 from 63,630 kilometers in FY22.
  • Paper and Paperboard production capacity utilization was 98% in FY23 up from 93% capacity utilization in FY22.
  • Paper and Paper Board segment's sales volume increased by 2.18% from 303,715 tonnes in FY22 to 310,349 tonnes in FY23. Subsequently, Optical Fibre Cable segment's sales volume increased by 28.23% from 63,470 kilometers in FY22 to 81,388 kilometers in FY23.
  • The company has an extensive distribution network with 66 dealers as well as 6 zonal offices all over india. Additionally, exports its paper and paperboard products to over 15 countries.
  • The company will be commissioning a new greenfield plant in Rangareddy for its Optical Fibre Cable segment in order to meet the increased demand.

(L) Strengths & Weaknesses

Strengths of West Coast Paper Mills Ltd.

  • Favorable outlook for domestic paper consumption because of lower per-capita domestic usage than Global averages: Due to rising packaging product utilization and relatively low per capita usage of paper as of right now when compared to global standards, the long-term demand forecast for paper in the domestic market is still favorable. On the other hand, increasing digitalization continues to pose a long-term danger to the PWP segment's expansion.
  • Strong Distribution Network: The company has longstanding relationship with 66 dealers as well as has around 6 Zonal Offices across the country. Additionally, It exports to over 15 countries around the world.

Weaknesses of West Coast Paper Mills Ltd.

  • Susceptibility of cash flows to cyclicality in the paper industry – WCPL’s cash flows are exposed to the cyclicality in the paper industry. The domestic paper industry is small compared to the global scale and prices in India are largely determined by international trends. Hence, global the demand–supply balance impacts the health of the domestic industry and, accordingly, its margins remain vulnerable to the cyclicality in the global paper demand–supply scenario. However, an integrated nature of operations keep it well placed in absorbing any price shock relative to other players in the industry.

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References:  Annual Reports, News Publications, Investor Presentations, Corporate Announcements, Management Discussions, Analyst Meets & Management Interviews, Industry Publications.

Disclaimer: The report only represents the personal opinions and views of the author. No part of the report should be considered a recommendation for buying/selling any stock. Thus, the report & references mentioned are only for the information of the readers about the industry stated.

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