JK Paper, one of India's largest paper & packaging products companies, experienced a notable surge in its share price during early trade on Tuesday. This significant rebound followed a period of steady decline over the past three trading sessions as investors responded positively to JK Paper's Q1FY24 performance, leading to a strong pullback.
During Q1 FY24, the company reported a net profit of ₹312.56 crore, an increase of 18% as compared to a net profit of ₹264.23 crore recorded in the same quarter of the last fiscal year.
The revenue from operations was up 10.77% to ₹1,584.36 crore during the period as against ₹1,430.23 crore in the year-ago period. Its operating profit came in at ₹477 crore, a jump of 12.76% YoY, while the EBITDA margin came in flat at 30%.
Commenting on the results, Harsh Pati Singhania, Vice Chairman & Managing Director, said, "On a consolidated basis, the results have improved due to the acquisition of corrugation business during the last year and better performance by Sirpur Paper Mills with increased volume and higher sales realisation. However, the Packaging Board business witnessed a drop in volume and sales realization and was impacted by higher Pulp carrying cost."
“The Company further enhanced its social farm forestry initiative across all Plant locations there by improving the green cover in the states of Odisha, Gujarat, Maharashtra, Andhra Pradesh, and Telangana. This will ensure adequate availability of raw materials at affordable costs and make the Company to remain Wood and Carbon positive,” he added.
Following the healthy earnings, the company's shares opened on a positive note at ₹328.95 and further advanced to ₹336, reflecting a 7.25% increase compared to the previous closing price of ₹313.30 per share.
Meanwhile, the stock has faced significant selling pressure after reaching its 52-week high of ₹453 in December of the previous year. This downward trend persisted, culminating in the stock hitting a fresh 52-week low of ₹306 per share on July 10. At current levels, the stock is trading 27% below its one-year high.
JK Paper is a leading Indian player in office papers, coated papers, writing and printing papers, and high-end packaging boards. It had three integrated pulp and paper mills, including the JKPM unit at Rayagada (Odisha) near the eastern coast of India, Unit CPM at Songadh (Gujarat) on the western coast, and Unit SPM at Kagaznagar, Telangana.
The company's present installed capacity is 7,61,000 TPA, including the recent capacity expansion in the packaging board at unit CPM, as per the company's website.
03 analysts polled by MintGenie on average have a 'hold' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.