JK Paper Ltd. Is leading manufacturer and exporter of
Branded Copier Papers catering to Indian demand and also exporting to 35 countries.
It has two large integrated paper manufacturing units – JK Paper Mills,
Rayagada, Odisha and Central Pulp Mills, Songadh, Gujarat with a combined
capacity of 4,55,000 TPA. It is the market leader in Branded Copier
paper segment and among the top two players in Coated Paper and high-end
Packaging Boards.
Its products are sold through extensive distribution network
of 188 wholesalers, 10 depots & 4 regional marketing offices, and covering
nearly 4,000 dealers. It offers a wide product range and its brands are
synonymous with premium quality paper.
Company is continuously working on reduction in operating cost mainly fuel cost. Fuel represents one of the biggest costs in paper manufacturing. In 2012-13, 12 per cent of JK Paper’s costs were on account of power & fuel. This number declined to 7.68% in 2016-17 which reflects in improvement in EBIDTA margins which increased from 12.5% to approx 20 % in last 3 years.
Debt Equity Ratio declined from 2.02 to 1.08 in last 4 years and it is expected to reduce further. Company also received upgrade in credit rating from BBB+ to A which reflects improvement in financial health of company.
Looking at improved financial performance company increased dividend payout from 5% to 15% last year.
Financial Performance :
China is biggest manufacturer and exporter of paper. With rising environment concern an restrictions being introduced in China, Indian Paper industry may experience indirect benefit in export and that could improve demand, exports, margins and topline growth in future.
Based on expected EPS of 15-16 for year 16-17 and at a conservative PE multiple if 12 stock has good potential to touch Rs 185 in one year .
Debt Equity Ratio declined from 2.02 to 1.08 in last 4 years and it is expected to reduce further. Company also received upgrade in credit rating from BBB+ to A which reflects improvement in financial health of company.
Looking at improved financial performance company increased dividend payout from 5% to 15% last year.
Financial Performance :
| 2018-E |
2017
|
2016 | 2015 | 2014 | 2013 | |
| Revenue | 2800 | 2,764.03 | 2,454.72 | 2,158.83 | 1,737.87 | 1,459.11 |
| Other Income | 26 | 26.45 | 14.75 | 12.15 | 14.76 | 11.87 |
| Total Income | 2826 | 2,790.48 | 2,469.47 | 2,170.98 | 1,752.63 | 1,470.98 |
| Expenditure | -2210 | -2,439.24 | -2,048.64 | -1,904.49 | -1,631.61 | -1,310.83 |
| Interest | -150 | -187.64 | -198.4 | -203.93 | -121.86 | -49.9 |
| PBDT | 466 | 351.24 | 222.43 | 62.56 | -0.84 | 110.25 |
| Depreciation | -115 | -119.53 | -107.31 | -113.59 | -122.1 | -72.91 |
| PBT | 351 | 231.71 | 115.12 | -51.03 | -122.94 | 37.34 |
| Tax | -105 | -68.88 | -35.56 | 38.29 | 45.75 | 0.36 |
| Net Profit | 246 | 162.83 | 79.56 | -12.74 | -77.19 | 37.7 |
| Equity | 156 | 155.96 | 148.53 | 136.62 | 136.62 | 136.62 |
| EPS | 15.76 | 10.79 | 5.56 | -0.93 | -5.65 | 2.76 |
| NPM % | 8.79 | 5.89 | 3.24 | -0.59 | -4.44 | 2.58 |
| PE | 8 | |||||
| CMP | 128 | |||||
| Target PE | 12 | |||||
| Target Price | 185 |
China is biggest manufacturer and exporter of paper. With rising environment concern an restrictions being introduced in China, Indian Paper industry may experience indirect benefit in export and that could improve demand, exports, margins and topline growth in future.
Based on expected EPS of 15-16 for year 16-17 and at a conservative PE multiple if 12 stock has good potential to touch Rs 185 in one year .
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