Rainbow Papers posts impressive Q1 results, PAT up by 85.5%

Sales surge by 93.83% at Rs 97.46 cr

Q1 FY 11 Result Highlights :

• Sales up by 93.83% from Rs.50.28cr in Q1FY10 to Rs 97.46 Cr in Q1FY11
• EBITDA showed an improvement of  64.35% from Rs12.82cr in Q1FY10 to Rs 21.07 Cr in Q1FY11
• PAT has jumped from Rs 5.18cr in Q1FY10 to Rs 9.61cr Q1FY11
• Current expansion of capacity from  180,000 MT  to 305,000 MT is on track for completion in Q4 FY11.

RAINBOW PAPERS Limited is one of the leading paper manufacturing companies in India using the eco-friendly process of recycling of waste paper. The company reported a robust financial performance for the Q1 FY11, the Sales grew by 93.83 % on y-o-y basis and a PAT growth of 85.5% y-o-y.

The company is expanding its capacity from the existing 180,000 MT to 305,000 MT by adding a fully automatic Voith-make paper plant. The expansion project is progressing well and it is on track to get completed by Q4 FY11. The financing for the project is already tied up.

Talking on the results, Mr.Ajay Goenka, MD, RAINBOW PAPERS said, "We are pleased to report a robust financial performance for Q1 FY11 on the back of sustainable improvement in demand and our capability to supply after the increase in our capacity post the commissioning  PM 7 (Paper Mill 7) in the FY 2009-10. Our Endeavour will be to constantly look at cost optimization, channel expansion, integration of resources, manufacturing excellence, value added product diversification, resulting in better realization of margins and improved efficiencies and higher productions.”

“RAINBOW PAPERS is expanding its product category with the introduction of Folding Duplex Board, Coated Glazed papers and other varieties of environmentally benign paper”, adds Mr. Ajay Goenka

Outlook for FY 2010-11
The Indian Economy has rebounded strongly with renewed demand for paper and paper Products. The emphasis on primary Education, the rise in demand for newsprint and paper used for packaging will provide a strong momentum for the sales of a wide range of the Paper & Paper Products.

The setting up of the PM 7 during FY10 will lead to higher revenues and profits during the current financial year. Further, Rainbow Papers is installing a 350 TCD paper plant (PM 8), at their existing location. This paper plant will come into production by FY11. The company has successfully raised $27 million (Rs. 121 crore) through a GDR issue in the Year 2009-10. It has also raised a debt of Rs. 200 crore through a consortium of banks to finance its Rs. 327 crore expansion program. On completion of this expansion project the total capacity will reach 305,000 MT, making Rainbow one of the larger players in the Indian paper industry which is very fragmented and dispersed.

About RAINBOW PAPERS:
Rainbow Papers today is one of the fastest growing corporations in the Indian Paper Industry. Not only that, it has marked its presence in the global market and is currently exporting its products to various countries in the US, Middle East, South Africa, South East Asia and U.K. We offer a plethora of world class products ranging from Duplex to File Board, from writing paper to Art Card and from packaging and Electric grade crepe to Decorative tissues crepe, which has given us a good recognition amongst our users who thirst for better and new products. The Company, with its recent and forthcoming capacity expansions, will consolidate its standings as one of the leading Paper mfg. companies in the country.

Disclaimer: Statements in this document relating to future status, events, or circumstances, including but not limited to statements about plans and objectives, the progress and results of research and development, potential product characteristics and uses, product sales potential and target dates for product launch are forward-looking statements based on estimates and the anticipated effects of future events on current and developing circumstances  Such statements are subject to numerous risks and uncertainties and are not necessarily predictive of future results. Actual results may differ materially from those anticipated in the forward-looking statements. The company assumes no obligation to update forward-looking statements to reflect actual results, changed assumptions or other factors.