JK Paper up 9% on hopes of recovery in FY25; declares Rs 5 dividend

While the paper company posted a weak set of results, the company reportedly said that it expects higher volume growth in the paper and boards segment in the current financial year of 2024-25 (FY25)

JK Paper stock surges: Shares of JK Paper soared 8.87 per cent to an intraday high of Rs 380.96 per share on the BSE on Friday. 

While the paper company posted a weak set of results, the management reportedly said that it expects higher volume growth in the paper and boards segment in the current financial year of 2024-25 (FY25).

"We have taken price hikes in certain categories, and expect higher volume growth in paper and boards segment in FY25 vis-a-vis FY24," Veerappan KR, chief financial officer of JK Paper, said in a TV interview, as per reports.

Sales volumes grew 2.3 per cent in paper and boards during the previous financial year (FY24), and the company continues to focus on operational efficiencies.

The Board of Directors have recommended a final dividend of Rs 5 per share for FY24. 

Overall, in the March quarter of financial year 2024, JK Paper’s profit dipped 1.7 per cent to Rs 275.6 crore compared to Rs 280 crore in the previous year. 

Revenue, meanwhile, remained stagnant at Rs 1,719 crore year-on-year. 

However, Ebitda fell 26 per cent Y-o-Y to Rs 358 crore, from Rs 483 crore in the corresponding period last year.

Consequently, margin fell 730 basis points (bps) to 20.8 per cent, as compared to 28.1 per cent year-on-year.

On the weak performance of JK Paper, Chairman & Managing Director Harsh Pati Singhania said, "Significant increase in raw material cost and lower realisation across all categories have impacted performance during the quarter and year as a whole. The selling prices continued to remain under pressure due to increase in imports."

The Board of Directors have also approved acquisition of balance 15 per cent equity shares of its subsidiary companies Horizon Packs Pvt. Ltd. (HPPL) and Securipax Packaging An. Ltd. (SPPL). 

Post this acquisition, HPPL and SPPL will become wholly owned subsidiaries of the company, JK Paper said.

At 1:17 PM, shares of JK Paper were trading 5.73 per cent higher at Rs 369.95 per share. By comparison, S&P BSE Sensex was up 0.42 per cent at 73,975.45 levels.