JK PAPER 2019-20 Annual Report Analysis

Tue, 31 Mar

JK PAPER has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

JK PAPER Income Statement Analysis

• Operating income during the year fell 6.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 0.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 28.5% in FY20 as against 26.7% in FY19.
• Depreciation charges increased by 17.1% and finance costs increased by 3.9% YoY, respectively.
• Other income grew by 107.7% YoY.
• Net profit for the year grew by 10.2% YoY.
• Net profit margins during the year grew from 13.0% in FY19 to 15.3% in FY20.

JK PAPER Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	32,567	30,602	-6.0%
Other income	Rs m	501	1,041	107.7%
Total Revenues	Rs m	33,068	31,643	-4.3%
Gross profit	Rs m	8,680	8,711	0.4%
Depreciation	Rs m	1,277	1,495	17.1%
Interest	Rs m	1,244	1,293	3.9%
Profit before tax	Rs m	6,660	6,964	4.6%
Tax	Rs m	2,411	2,280	-5.4%
Profit after tax	Rs m	4,249	4,684	10.2%
Gross profit margin	%	26.7	28.5
Effective tax rate	%	36.2	32.7
Net profit margin	%	13.0	15.3

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JK PAPER Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 10 billion as compared to Rs 8 billion in FY19, thereby witnessing an increase of 21.8%.
• Long-term debt stood at Rs 14 billion as compared to Rs 13 billion during FY19, a growth of 10.7%.
• Current assets rose 2% and stood at Rs 14 billion, while fixed assets rose 24% and stood at Rs 39 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 53 billion as against Rs 45 billion during FY19, thereby witnessing a growth of 17%.

JK PAPER Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	20,381	23,655	16.1
Current Liabilities	Rs m	8,404	10,236	21.8
Long-term Debt	Rs m	12,873	14,251	10.7
Total Liabilities	Rs m	45,221	52,905	17.0
Current assets	Rs m	14,004	14,266	1.9
Fixed Assets	Rs m	31,217	38,638	23.8
Total Assets	Rs m	45,221	52,905	17.0

JK PAPER Cash Flow Statement Analysis

• JK PAPER's cash flow from operating activities (CFO) during FY20 stood at Rs 6 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -1 billion on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 153 million from the Rs -966 million net cash flows seen during FY19.

JK PAPER Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	8,789	5,577	-36.5%
Cash Flow from Investing Activities	Rs m	-11,152	-3,949	-
Cash Flow from Financing Activities	Rs m	1,397	-1,475	-
Net Cash Flow	Rs m	-966	153	-

Current Valuations for JK PAPER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 26.3, an improvement from the EPS of Rs 23.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 74.6, stands at 2.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.5 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 3.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	182.7	171.7
TTM Earnings per share	Rs	23.8	26.3
Diluted earnings per share	Rs	25.1	27.7
Price to Cash Flow	x	4.4	3.1
TTM P/E ratio	x	5.5	2.7
Price / Book Value ratio	x	1.3	0.8
Market Cap	Rs m	26,015	19,402
Dividends per share (Unadj.)	Rs	3.5	4.0

Ratio Analysis for JK PAPER

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY20, from 1.7x during FY19. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 6.4x during FY20, from 6.4x during FY19. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 19.8% during FY20, from 20.8% during FY20. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 21.8% during FY20, from 23.8% during FY19. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 11.3% during FY20, from 12.1% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	1.7	1.4
Debtors’ Days	Days	1	1
Interest coverage	x	6.4	6.4
Debt to equity ratio	x	0.6	0.6
Return on assets	%	12.1	11.3
Return on equity	%	20.8	19.8
Return on capital employed	%	23.8	21.8

To see how JK PAPER has performed over the last 5 years, please visit here.

JK PAPER Share Price Performance

Over the last one year, JK PAPER share price has moved down from Rs 142.9 to Rs 74.6, registering a loss of Rs 68.4 or around 47.8%.

Overall, the S&P BSE SENSEX is down 24.2% over the year.

(To know more, check out historical annual results for JK PAPER and quarterly results for JK PAPER)

Read: Latest Annual Report Analysis of JK PAPER