J K Paper shares touched a new high of Rs 296.55, up 7.05% on the BSE in Tuesday’s intraday session, after surging as much as 32.8% in the previous week on improved business prospects. The reopening of offices, educational institutions, and courts will result in a return to normalcy in paper demand. In comparison, the S&P BSE Sensex gained 6% during the same time period. The stock outperformed its previous high of Rs 284.80 set on August 9, 2021.
On January 14, 2022, the company informed the stock exchanges that commercial production from its new packaging board facility in Gujarat had commenced.
In the last three months, the stock has outperformed the market by 35%, compared to a 2.3% fall in the S&P BSE Sensex.
JK Paper reported a 134% year-on-year (YoY) increase in profit after tax of Rs 151 crore for the October-December quarter (Q3FY22), on the basis of a 35% YoY increase in turnover of Rs 1,094 crore.
The company’s performance had improved, according to management, due to a rebound in the paper industry, increased production and sales volume, and greater realisation. This was despite a recent substantial spike in main input costs.
“The outlook for the paper sector is optimistic in India on account of the intrinsic use of paper in education in India, based on which the market for writing and printing paper in India is expected to grow around 4 per cent per annum, higher than the global average,” JK Paper said in FY21 annual report.
The packaging board market in India is expected to grow at a rate of 9% to 10% per year, compared to roughly 4% globally. According to the company, personal use and the increasing replacement of plastic items are driving this development.