JK Paper Q2 net jumps 24%; to raise Rs 250 cr

JK Paper today reported 24.17 per cent jump in its net profit for the quarter ended September 30 at Rs 29.08 crore, as compared to Rs 23.42 crore in the same period last year, mainly on better sales of its products.

The company's board also gave its approval to raise Rs 250 crore through debt and equity for funding its Rs 1,500-crore expansion programme.

The gross sales of the company during the second quarter increased by 9.25 per cent to Rs 364.06 crore from Rs 333.23 crore in the year-ago period.

"Demand was good for all our products and better sales realisation helped us in registering such growth. Increased efficiency and better capacity utilisation also helped," JK Paper Managing Director Harsh Pati Singhania told PTI.

Change in product mix also helped the company to attain higher revenues despite input costs going up, he added.

"Besides, interest costs have gone down in the last six months to Rs 17 crore as against Rs 23 crore in the same period last fiscal," Singhania said.

The company's current debt stands at below Rs 500 crore. It was over Rs 600 crore as on September 30, 2009.

When asked about fund raising plans to support the company's ambitious expansion programme, Singhania said: "Our board has approved today to raise Rs 250 crore through convertibles and equity."

He said the company has already initiated talks with some financial players to raise the amount, but declined to share details.

"We may issue fresh shares or some convertible bonds, but nothing has been decided now," he said, adding that some amount will be raised within this fiscal and rest in 2011-12.

Earlier the company had announced to invest Rs 1,500 crore to expand the production capacity at its facility in Orissa.

JK Paper is looking at increasing its total annual capacity to 4 lakh tonnes from 2.5 lakh tonnes in the next two years. The company has another plant in Gujarat.

The company sells paper brands like JK Copier, JK Easy Copier and JK Copier Plus. The products now sport Colorlok logo after the paper maker formed a technological tie up with IT product maker Hewlett Packard to introduce a new range of high-end digital printing papers in India.

At present, the firm sells its papers within the range of Rs 120 and Rs 125 per ream. Despite the impressive results, the shares of the company today moved 1.63 per cent down and closed at Rs 72.35 on the Bombay Stock Exchange.