At a Glance
JK Paper Ltd is folding more than just A4 sheets this quarter. Q1 FY26 revenue hit ₹1,785 Cr (+6.6% QoQ), while PAT rose 7% to ₹85 Cr, even as margins remain under pressure. Add a ₹500 Cr NCD raise and a surprise 72% stake buy in Borkar Packaging, and you have a paper company writing its own dramatic script.
Introduction
Imagine a printer jam right when you’re printing your CV—JK Paper’s stock feels like that. Once a smooth operator with 30%+ margins, now struggling with raw material costs, weak demand, and falling stock price (-32% YoY). Yet, the company is pulling out acquisitions and debenture tricks to stay in the game.
Business Model (WTF Do They Even Do?)
JK Paper manufactures office papers, coated papers, and packaging boards. Their revenue mix:
- Printing & Writing Papers – traditional breadwinner.
- Packaging Boards – growing steadily.
- Acquisitions (Borkar Packaging & BPPL) – new play into value-added packaging.
Think of them as the IKEA of paper—flat, functional, but now eyeing premium packaging furniture.
Financials Overview
- Revenue (Q1 FY26): ₹1,785 Cr (+6.6% QoQ, -2.3% YoY)
- Net Profit: ₹85 Cr (+7% QoQ, -41.9% YoY)
- OPM: 15% (a far cry from the glory days of 30%)
- ROCE: 9.4%
- ROE: 7.8%
Verdict: Profits rebounded sequentially, but YoY slump shows the party isn’t back yet.
Valuation
- P/E: 17.1×
- CMP/BV: 1.1× (cheap but justifiable)
- Fair Value Range: ₹320–₹400
DCF says ₹320, market trading ₹354—some optimism still priced in.
What’s Cooking – News, Triggers, Drama
- Acquisition: 72% in Borkar Packaging (₹393 Cr turnover) & majority in BPPL.
- Fundraise: ₹500 Cr via NCDs to fuel expansion.
- Stock Price: Down 32% YoY despite expansion moves.
- Margins: Shrinking faster than an A4 in a rainstorm.
Corporate gossip rating: Sensible moves in a tough market.
Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 8,920 | 9,326 | 9,548 |
| Liabilities | 5,055 | 4,257 | 4,140 |
| Net Worth | 4,034 | 4,900 | 5,238 |
| Borrowings | 2,803 | 2,204 | 1,885 |
Commentary: Debt falling, net worth rising—still financially strong.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 1,762 | 1,376 | 613 |
| Investing | -948 | -410 | -2 |
| Financing | -787 | -938 | -656 |
Punchline: Ops cash flow halved—company is sweating under cost pressure.
Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE % | 28% | 20% | 8% |
| ROCE % | 16% | 20% | 9% |
| P/E | 10× | 15× | 17× |
| PAT Margin % | 19% | 17% | 7% |
| D/E | 0.6 | 0.4 | 0.3 |
Verdict: Ratios fell off a cliff, but leverage is low.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 6,437 | 6,659 | 6,718 |
| EBITDA | 2,012 | 1,616 | 928 |
| PAT | 1,208 | 1,133 | 412 |
Commentary: Revenue flat, margins squeezed, PAT collapsed.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| West Coast Paper | 4,062 | 311 | 11.4× |
| Seshasayee Paper | 1,718 | 88 | 20.2× |
| Andhra Paper | 1,541 | 59 | 25.6× |
| Kuantum Papers | 1,107 | 115 | 9.8× |
| JK Paper | 6,679 | 357 | 17.1× |
Humour: The big brother of the paper gang, but currently out of ink.
Miscellaneous – Shareholding, Promoters
- Promoter Holding: 49.6% (stable)
- FIIs: 11.8%
- DIIs: 5.5%
- Public: 33.1%
Promoters rock solid, FIIs showing faith—public selling on weakness.
EduInvesting Verdict™
JK Paper is diversifying into packaging to escape commodity traps. Good moves, bad timing—margins are squeezed, demand is soft, and stock price is sulking. Yet, strong balance sheet and expansion strategy keep it alive.
Final Word: More than just a sheet, but not yet a glossy magazine.
Written by EduInvesting Team | 28 July 2025
SEO Tags: JK Paper, Packaging Expansion, Paper Stocks, Borkar Packaging Acquisition
