JK Paper Q4 Results Review - A Good Quarter In Challenging Times: IDBI Capital

IDBI Capital Report

JK Paper Ltd.’s Q4 FY24 result was a mixed bag as net sales came inline with our forecast, while profit after tax was a beat. Despite challenging business environment on net sales realisation front, the company pulled off the quarter led by higher sales volume.

The management has guided healthy double digit net sales growth in FY25E, while operating margin to improve owing to prudent cost management.

As the industry has witnessed price hike in few categories of paper and domestic demand looks promising, we anticipate healthy earnings revival in FY25E/FY26E on both net sales and margins front.

We have marginally increased our net sales/Ebitda estimates by 3%/4% and4%/12% respectively over FY25E/FY26E.

We upgrade the stock to Buy with a revised target price of Rs 462 (earlier Rs 431), assigning 4.5 times enterprise value/Ebitda on FY26E.

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