Lot of capacity increases…this will increase supply…and price will come down evetually…
Just my thought…
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Paper industry is expected to flourish in mid to long term.
Paper and pulp mills are closing globally at a faster pace and i believe that there wont be an issue of oversupply at-least for another 2-3 years.
Please have a look at https://www.risiinfo.com/press-release/pulp-paper-industry-sees-more-than-60-mill-closures-in-past-year/
The usage of paper due to e-commerce space is yet to increase.
BOSTON, MA, Jan. 22, 2015 (Press Release)…The above one dated on 2015…which means that run is already completed in all paper stocks…now from 2019 to next 3 yrs …need to know
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Can anyone share latest kotak securities report on jk paper dated 8/4/19.
Why company is raising cash, they can do expansion with current cash flows,any views @maven26 @deepakom @nagireddy1991 @devaki.tripathy
We can understand the decision more carefully after q4 results only which will give us a better idea of the financial standing.
IMHO, this is due to the current liquidity crisis, JK paper might be looking to keep the funds available to cater to short term payments. It makes sense especially when the investment is returning a higher ROI than the interest expended.
A different view is welcome.
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Results are out sales and profit are lower on sequential basis, results are showing softness in
prices of final product
Results look pretty good on the back of scheduled annual shutdown in Odisha unit, Margins seem to be up considerably and company also mentioned below in result declaration
“Higher realisation, lower input cost and enriched product mix coupled with better operating parameters have contributed to growth in profitability.”
Enhanced dividend of 3.5 Rs also look encouraging.
But anindya i think it would be better to think that this is the highest results we could have expected, for next financial it would be the bar, i dont think they can further increase there sales, and now selling prices of finished goods are also falling , it would be interesting to see thay “ab aagey kya” , definitely sirpur mill production not to be missed as a positive part
Next quarter results will include sirpur mills as you know
If you add sirpur mills, the PE is much lower than other paper company stocks
In this quarter you also have some of the costs of sirpur mills as sirpur started production on 1st April so some costs would have come in this quarter although most should be inventory and not really cost but it’s not so easy to have a clear cutoff
There will also be interest expenses to buy/modernise sirpur mills assuming it can’t be capitalised as it’s not for construction of capital assets that would be in this quarter
The higher interest rate in this quarter means probably it wasn’t capitalised
All this will be ironed out next quarter with probably a higher margin
Hopefully we will be other end of election and market malaise will be behind us
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Promoters acquired 41923129 shares on 28yh May.
https://www.bseindia.com/stock-share-price/jk-paper-ltd/jkpaper/532162/
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Mr. Mehta says Full-fledged production at Sirpur will start from October 2019, though they started production already.
Came across this wonderful piece of report on Indian Paper Industry ( though old 2018 Aug)… Please go through… extensive analysis is done…
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Please clear why 20% growth from sirpur mill and not 30% @edwardlobo @maven26 @deepakom @nagireddy1991 @devaki.tripathy
Hi Kush, Kotak has forecasted flat growth for FY20. Is it accounting contribution from Sirpur?
Any inputs will be highly appreciated
Paper prices are past their prime. There is no scope of further increase. Last year was a top year by any standard when it comes to price rise and shortages. Chinese ban on import of recyclable/waste paper was a boon for Indian companies.
Many Chinese plants have now reopened and also selective imports have been allowed too. The Indian companies who were exporting 8 to 10 containers have come down to 3 or 4.
The price is still high but with downward bias. Paper companies will have a good 19-20 but will growth will not be like last year. Price will start falling from aug or Sept. Pulp prices are not going down due to renewed demand from china.
Also, some Indian plants have started or increased production.
Just my analysis based on discussion with our vendors who buy paper from JK, NRAgarwal and others. So it is not as accurate as the learned and enlightened VPs. I am not good in number crunching.
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Thanks for the insights. Basically any growth from the capacity expansion will be offset by lower price realizations. As such, no company has any pricing power here
Volume growth should definitely be higher…As mentioned by A S Mehta, even i recollect them giving a guidance of 100,000 tons of sales from Sirpur in concalls or some other interviews…So, yes even though margins may fall by 1-2% in FY20 vs FY19, I feel volumes will grow significantly.
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