JK Paper Ltd. aims more than 10% growth in the ongoing fiscal as demand rises.
The company clocked its highest ever quarterly turnover and profit at Rs 1,340 crore and Rs 170 crore, respectively, in the three months to March. It also reported the highest ever annual revenue at Rs 3,969 crore in FY22, up 44%.
Robust demand in the fourth quarter led to higher sales volume and better realisation in spite of a substantial increase in input costs in the last few months, according to AS Mehta, president and director at the paper mill. A new packaging plant commissioned in January this year also aided the sales volume.
Education demand has played a “pivotal role”, and is likely to remain strong, Mehta told BQ Prime's Niraj Shah in an interview. The packaging board segment, he said, is growing even faster and might aid organised firms such as JK Paper.
The company's gross margin, however, contracted sequentially in the fourth quarter. High input costs, according to Mehta, have offset a hike in product prices. Still, EBITDA margin improved over the preceding three months on a 1% decline in employee expenses.
Mehta sees 3-5% growth for the paper sector, indicating a faster growth for organised companies. Also, the commissioning of its new capacity will aid growth. The company, he said, might consider setting up more capacities after the new plant stabilises.
Watch the full interview here:
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