JK Paper Q1 profit jumps manifold to Rs 104 cr on back of higher sales

JK Paper on Friday reported a multi-fold jump in consolidated net profit at Rs 104.22 crore for the first quarter ended June 30 on the back of higher sales and better realisation.

The company, which had posted a net profit of Rs 2.66 crore in the year-ago period, said its board has approved an investment of Rs 150 crore for setting up a corrugated packaging plant.

Revenue from operations stood at Rs 660.75 crore as against Rs 469.24 crore in the year-ago period, JK Paper said in a regulatory filing.

"Higher volume with better realisations across all segments resulted in improved performance during the quarter despite the impact of the 2nd wave of the COVID-19 pandemic," JK Paper Vice Chairman and Managing Director Harsh Pati Singhania said.

Reopening of educational institutions in a gradual manner will improve demand for writing and printing paper, he said adding, "the company continued its focus on reducing cost, enriching product mix and serving its customers better".

"The plantation activities remain as a prime focus area to procure adequate raw material at economical cost," Singhania said.

JK Paper said its performance on consolidated basis was also better in the quarter due to steady operational performance of Sirpur Paper Mills Ltd, a step-down subsidiary.

The packaging board project at 'Unit-CPM' is progressing well despite some delay in supplies due to the impact of COVID-19 and trial production is expected to start in the current quarter, it added.

The board has also approved an investment of Rs 150 crore for setting up a corrugated packaging plant, it said without sharing details.

The company also said its board has approved acquisition of the business of Deepti Electronics & Electro Optics Pvt Ltd (Delopt) as a going concern on slump sale basis for a net cash consideration of around Rs 25 crore.

Delopt is engaged in the business of design, development and production of embedded systems and electro-optics systems which includes supplying thermal imaging, people counting systems and other electro optics products and services that have defence and civilian applications.

The business transfer agreement is expected to be concluded within three months after requisite approval of Delopt board and other terms and conditions but there would be no acquisition of shares of Delopt by the company pursuant to the said transaction, the filing said.

"Acquisition of this business will enable the company to diversify its business portfolio and enhance its economic value from emerging electro-optics business," JK Paper said.