JK PAPER LIMITED

Scrip Code: JK PAPER Established in 1962, JK Paper is a major wood-based paper manufacturer in
India. The Company’s product portfolio comprises office paper, writing and
Sector
rE Paper printing paper, packaging board and specialty paper. JKP is the market leader in
the branded office paper segment and has a pan India distribution network.
Current Market Price ₹ 98
52 Week High/Low ₹ 141 / ₹ 62 The company has three plants in India:

1 Year Returns -13.40 % Plants and Tonnes Per Annum (TPA)

400,000
3 Year Returns -6.9 % 295,000
300,000
160,000
Face Value ₹ 10 200,000 136,000
100,000
EPS (12 Month) ₹ 14.80 -
JK PAPER , Odisha Central Pulp Mill, Gujarat Sirpur Paper Mill,
Book Value per share ₹ 138 Telangana
Dividend Yield 4%
Analysts view: In the capital-intensive business of paper manufacturing, the
Operating Profit Margin 22% two principal raw materials are wood and funds. A complement of both makes
it possible for companies to grow in the long run and absorb cyclical shocks. JKP
Trailing 12M Revenue (Crores) ₹ 2,665
has managed to attain this balance over the last decade while many major
Trailing 12M Net Profit (Crores) ₹ 264 industry players collapsed. The net debt of JKP has reduced significantly and
now stands at ₹ 1,290 crores, which is manageable as major capex cycle is over
Market Cap (Crores) ₹ 1,726 and cash flow is stable. The plantation coverage cumulatively reached 1.73 lakh
hectares in 2020 and the company procures 96% of wood within 200 KM’s of its
Shareholding Pattern plants.

India is the fastest growing paper market, and the increasing demand has been
addressed by cheaper imports from China and other FTA countries. The imports
are likely to drop from China after deterioration of trade relations. Also, India
opting out of RCEP will help domestic firms. The Covid-19 disruption was severe
43.11% on all paper firms. Though normalcy has returned in many sectors, the
reopening of educational institutions is key for paper manufactures as it is a
51.11%
major market. The increased demand for paper boards & packaging paper from
E-commerce companies and speciality paper has come to the rescue of paper
companies during this year. The ban of single use plastic bags by several States
in India is benefitting the industry and this share is likely to get bigger. The
5.78% promoter group raising its stake by 3% during the Covid-19 led sell off and the
fact that there is no pledge of shares even during a tough year like 2020 are
Promoters Institutions Public reassuring factors. At the current price of ₹98, the stock is fairly priced, and one
can consider investing with a 3-year time horizon.
Price Movement
200.00 Financials (Crores)
150.00 Particulars H1 FY21 FY 2020 FY 2019 FY 2018
Income 1,102 3,164.00 3,306.71 2,866.78
100.00
Expenses 923.65 2,467.61 2,640.67 2,491.36
50.00 Operating Profit 178.35 696.39 666.04 375.42
Net Profit 92.90 475.32 427.28 260.58
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1/1/2017 1/1/2018 1/1/2019 1/1/2020