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JK PAPER 2022-23 Annual Report Analysis

Sun, 6 Aug

JK PAPER has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

JK PAPER Income Statement Analysis

• Operating income during the year rose 57.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 64.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 26.3% in FY23 as against 25.1% in FY22.
• Depreciation charges increased by 22.7% and finance costs increased by 29.9% YoY, respectively.
• Other income declined by 29.0% YoY.
• Net profit for the year grew by 62.8% YoY.
• Net profit margins during the year grew from 13.7% in FY22 to 14.2% in FY23.

JK PAPER Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	39,686	62,321	57.0%
Other income	Rs m	1,375	976	-29.0%
Total Revenues	Rs m	41,061	63,297	54.2%
Gross profit	Rs m	9,973	16,392	64.4%
Depreciation	Rs m	1,931	2,368	22.7%
Interest	Rs m	1,450	1,885	29.9%
Profit before tax	Rs m	7,967	13,115	64.6%
Tax	Rs m	2,529	4,262	68.5%
Profit after tax	Rs m	5,438	8,853	62.8%
Gross profit margin	%	25.1	26.3
Effective tax rate	%	31.7	32.5
Net profit margin	%	13.7	14.2

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JK PAPER Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 14 billion as compared to Rs 13 billion in FY22, thereby witnessing an increase of 9.8%.
• Long-term debt down at Rs 17 billion as compared to Rs 26 billion during FY22, a fall of 33.3%.
• Current assets rose 3% and stood at Rs 21 billion, while fixed assets rose 2% and stood at Rs 57 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 78 billion as against Rs 76 billion during FY22, thereby witnessing a growth of 2%.

JK PAPER Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	29,960	37,744	26.0
Current Liabilities	Rs m	12,980	14,246	9.8
Long-term Debt	Rs m	26,086	17,394	-33.3
Total Liabilities	Rs m	76,245	78,012	2.3
Current assets	Rs m	20,261	20,854	2.9
Fixed Assets	Rs m	55,984	57,158	2.1
Total Assets	Rs m	76,245	78,012	2.3

JK PAPER Cash Flow Statement Analysis

• JK PAPER's cash flow from operating activities (CFO) during FY23 stood at Rs 14 billion, an improvement of 78.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -7 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -7 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 183 million from the Rs 27 million net cash flows seen during FY22.

JK PAPER Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	7,736	13,779	78.1%
Cash Flow from Investing Activities	Rs m	-8,740	-6,556	-
Cash Flow from Financing Activities	Rs m	1,031	-7,040	-
Net Cash Flow	Rs m	27	183	583.9%

Current Valuations for JK PAPER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 52.3, an improvement from the EPS of Rs 32.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 331.0, stands at 4.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 0.9 times.
• The company's price to cash flow (P/CF) ratio stood at 5.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	234.3	367.9
TTM Earnings per share	Rs	32.1	52.3
Diluted earnings per share	Rs	32.1	52.3
Price to Cash Flow	x	7.0	5.4
TTM P/E ratio	x	9.5	4.5
Price / Book Value ratio	x	1.3	1.6
Market Cap	Rs m	38,052	60,947
Dividends per share (Unadj.)	Rs	5.5	8.0

Ratio Analysis for JK PAPER

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during FY23, from 1.6x during FY22. 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 8.0x during FY23, from 6.5x during FY22. 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 improved and stood at 23.5% during FY23, from 18.2% during FY23. 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 improved and stood at 27.2% during FY23, from 16.8% during FY22. 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 improved and stood at 13.8% during FY23, from 9.0% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.6	1.5
Debtors’ Days	Days	2	1
Interest coverage	x	6.5	8.0
Debt to equity ratio	x	0.9	0.5
Return on assets	%	9.0	13.8
Return on equity	%	18.2	23.5
Return on capital employed	%	16.8	27.2

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 382.7 to Rs 331.0, registering a loss of Rs 51.8 or around 13.5%.

Overall, the S&P BSE SENSEX is up 12.6% over the year.

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