JK Paper and Andhra Paper report poor results
Andhra Paper and JK Paper have been impacted by sluggish results. The margins for JK Paper have dipped from 25% to 16% while Andhra Paper has reduced from 27% to 12%.
06 Nov 2024 | 4330 Views | By Dibyajyoti Sarma
The JK Paper stock declined 2.3% to Rs 446.15 as the company reported a 57.8% year-on-year (YoY) decline in net profit. The company grappled with profitability due to elevated wood costs and increased competition from lower-priced imports. Despite these challenges, JK Paper’s EBITDA stood at Rs. 295-crore, while the profit after tax (PAT) amounted to Rs. 128-crore for the quarter.
The company’s strategic focus on value-added products, such as coated papers, virgin fibre packaging boards, and high-end Maplitho, is expected to drive revenue stability amid fluctuating market conditions.
Meanwhile, Andhra Paper's net profit has witnessed a dip of 58% which saw net profit at Rs 41.72 crore (YoY)and revenue down at Rs 432 crore (YoY).
As per market pundits, the low margins have resulted in a compromised EPS and an expansion of the valuations as the revenues have remained flat for JK Paper and decreased by 10% for Andhra Paper. One major reason is attributed to imported paper from China and Indonesia which has impacted profit margins for the domestic paper industry.