JK Paper at a glance

JK Paper is one of the largest paper manufacturing companies in India. With three plants in three different states, the company has its own cultivation of pulp used in paper production.

10 Feb 2021 | By Aultrin Vijay

Currently, JK Paper is present in three high growth segments – coated wood free, uncoated wood free and virgin fibre-based packaging boards constituting roughly 22.8% of the total market.

In terms of copier paper, JK is the market leader with current market share at 24%. In coated paper and packaging board, however, the company ranks among the top two companies with a market share of 12% and 14% respectively.

The company produces a total of 4,55,000 MT of paper in which uncoated paper accounts for 2,92,000 MT of the product mix. Meanwhile, coated paper accounts for 54,000 MT of the total product, whereas packaging board stands at 90,000 MT and saleable pulp at 19,000 MT.

However, closure of schools and the Covid-19 pandemic has had a disturbing impact on JK Paper with the company reporting -14.11% fall in revenues for the December 2020 quarter on a consolidated basis at Rs 704.88 crore. The company also cited lower selling prices for de-growth.

JK Paper also closed its Sirpur Paper subsidiary to adjust supply to the lower demand. The consolidated profit after tax (PAT) for the December 2020 quarter was down -51.01% at Rs 64.59 crore as the lower output and the shutdown in the Sirpur Paper plan led to inadequate absorption of fixed costs in the midst of falling selling prices of paper. PAT margins also contracted from 16.07% in December 2019 to 9.16% in December 2020 quarter.

With schools reopening in many parts of the country, the company’s profit margins are expected to grow. However, the price hikes in newsprint could also pose a challenge to the company’s overall growth. Only time can tell.


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