JK PAPER 2020-21 Annual Report Analysis

Wed, 31 Mar

JK PAPER has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

JK PAPER Income Statement Analysis

• Operating income during the year fell 10.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 35.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 20.4% in FY21 as against 28.5% in FY20.
• Depreciation charges increased by 16.6% and finance costs increased by 0.4% YoY, respectively.
• Other income grew by 8.1% YoY.
• Net profit for the year declined by 49.5% YoY.
• Net profit margins during the year declined from 15.3% in FY20 to 8.6% in FY21.

JK PAPER Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	30,602	27,507	-10.1%
Other income	Rs m	1,041	1,125	8.1%
Total Revenues	Rs m	31,643	28,632	-9.5%
Gross profit	Rs m	8,711	5,618	-35.5%
Depreciation	Rs m	1,495	1,743	16.6%
Interest	Rs m	1,293	1,298	0.4%
Profit before tax	Rs m	6,964	3,702	-46.8%
Tax	Rs m	2,280	1,335	-41.4%
Profit after tax	Rs m	4,684	2,367	-49.5%
Gross profit margin	%	28.5	20.4
Effective tax rate	%	32.7	36.1
Net profit margin	%	15.3	8.6

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JK PAPER Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 11 billion as compared to Rs 10 billion in FY20, thereby witnessing an increase of 11.9%.
• Long-term debt stood at Rs 24 billion as compared to Rs 14 billion during FY20, a growth of 65.5%.
• Current assets rose 13% and stood at Rs 16 billion, while fixed assets rose 28% and stood at Rs 49 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 66 billion as against Rs 53 billion during FY20, thereby witnessing a growth of 24%.

JK PAPER Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	23,655	25,161	6.4
Current Liabilities	Rs m	10,236	11,459	11.9
Long-term Debt	Rs m	14,251	23,584	65.5
Total Liabilities	Rs m	52,905	65,549	23.9
Current assets	Rs m	14,266	16,141	13.1
Fixed Assets	Rs m	38,638	49,408	27.9
Total Assets	Rs m	52,905	65,549	23.9

JK PAPER Cash Flow Statement Analysis

• JK PAPER's cash flow from operating activities (CFO) during FY21 stood at Rs 5 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -13 billion, an improvement of 224.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 8 billion, an improvement of 631% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -225 million from the Rs 153 million net cash flows seen during FY20.

JK PAPER Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	5,577	4,752	-14.8%
Cash Flow from Investing Activities	Rs m	-3,949	-12,815	-
Cash Flow from Financing Activities	Rs m	-1,475	7,838	-
Net Cash Flow	Rs m	153	-225	-

Current Valuations for JK PAPER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 14.0, an decline from the EPS of Rs 26.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 149.9, stands at 10.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.0 times, while the price to sales ratio stands at 0.9 times.
• The company's price to cash flow (P/CF) ratio stood at 5.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	171.7	162.4
TTM Earnings per share	Rs	26.3	14.0
Diluted earnings per share	Rs	27.7	14.0
Price to Cash Flow	x	2.0	5.0
TTM P/E ratio	x	2.7	10.7
Price / Book Value ratio	x	0.8	0.8
Market Cap	Rs m	19,402	20,455
Dividends per share (Unadj.)	Rs	4.0	4.0

Ratio Analysis for JK PAPER

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY21, from 1.4x during FY20. 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 deteriorated and stood at 3.9x during FY21, from 6.4x during FY20. 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 9.4% during FY21, from 19.8% during FY21. 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 10.3% during FY21, from 21.8% during FY20. 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 5.6% during FY21, from 11.3% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	1.4	1.4
Debtors’ Days	Days	1	1
Interest coverage	x	6.4	3.9
Debt to equity ratio	x	0.6	0.9
Return on assets	%	11.3	5.6
Return on equity	%	19.8	9.4
Return on capital employed	%	21.8	10.3

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 up from Rs 74.6 to Rs 149.9, registering a gain of Rs 75.4 or around 101.1%.

Overall, the S&P BSE SENSEX is up 74.1% 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