Paper Stocks Surge After Q1 Results

Shares of Indian paper makers gained after their quarterly profit surged on improved demand.

JK Paper Ltd.'s earnings surpassed estimates on account of high volume growth from the packaging segment, according to B&K Securities. A rise in capacity utilisation, price hikes and a shift toward formalisation could aid profitability of organised players such as JK Paper, the brokerage said.

High sales volume, B&K Securities said, indicated inherent demand and raised its volume and realisation estimates for JK Paper for FY23E and FY24E.

JK Paper Q1 (Consolidated, YoY)

• Net profit at Rs 261.98 crore Vs Rs 104 crore

• Revenue at Rs 1,430.2 crore Vs. Rs 660.8 crore

• Ebitda at Rs 423.13 crore Vs. Rs 190.3 crore

• Ebitda margin at 30% Vs. 29%

Andhra Paper Q1 (YoY)

• Net profit at Rs 84.95 crore Vs. Rs 26.14 crore

• Revenue at Rs 452.01 crore Vs. Rs 258.42 crore

• Ebitda at Rs 123.63 crore Vs. Rs 41.71 crore

• Ebitda margin at 27.35% Vs. 15.87%

The trading volume of JK Paper's stock was more than five times the 30-day average when markets closed, with its Relative Strength Index at 75, suggesting it may be 'overbought'. All the three analysts tracking the company suggest a 'buy', according to Bloomberg data. The 12-month consensus price target implies a 12.8% upside.

Andhra Paper's trading volume was 17 times the 30-day average. Its RSI was 77, suggesting it may be 'overbought'.