Market thinks so as the rerating in the paper industry is not happening.
I normally look at the EPS. PE vs EPS of 10 years for JK paper Ltd.
Andhra Paper
If it is able to sustain the net profit margins for very long time, hence changes of rerating can be there. It is only possible if this time by your research you can know that something is different this time or JK paper is a different beast which most of the market participants are not able to anticipate.
From the article(How to do Business Analysis of Paper Manufacturing Companies – Dr Vijay Malik)
In cyclical industry, each time investors and owners think that this time is different and invest in capacities.
Though there are only few companies that are able to become consistent compounder from being a cyclical company.
In the article there is also a case study on Century Textiles & Industries Ltd,
I am not expert in the paper sector and hence will like to not answer it further.
Disclaimer – Not even a novice in a paper industry and take my feedback with the pinch of salt.
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