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"The company will be introducing new brands, expanding pan-India distribution network and making a re-entry into the Maplitho segment. There is a wide market that can absorb huge capacity addition," company president AS Mehta told PTI. Stating that JK Papers had clocked a turnover of Rs 1,721 crore in 2012-13, he said contribution from exports, currently at about five per cent of total sales, would double to 10 percent in the next one year with the company embarking on new outlets in Australia and a few African countries.
On future plans, Mehta said the company would adopt a three pronged strategy. "We will introduce new brands in the market, including some that are not currently manufactured like hi-end paper for digital printing. This is expected to widen the company's offerings in the market place."
He said JK Paper was also strengthening the distribution network, targeting distributors in Bihar, Western UP, Punjab, Haryana, Karnataka and North East. "As of now, there are 130 distributors and wholesale traders across the country tagged with over 4,000 dealers and retail outlets. Before this fiscal end, the distribution network will increase to 160," he said.
Mehta said the product mix strategy was to dedicate the new machine predominately to A4 products. Existing machines would cater to Maplitho segment, a segment where JK Papers is making a re-entry. The company recently commissioned a plant at Rayagada in Orissa at an investment of Rs 1,750 crore adding nearly 60 percent to production capacity. With this, JK Paper would reach an annual capacity of 4.55 lakh tonnes from 2.90 lakh tonnes, he said.
The plant is expected to garner over Rs 1,000 crore additional revenue annually and would save a substantial amount on cost reduction by deploying state-of-art technology, combined with economies of scale and would help save chemicals, energy and water and making it environment friendly. The plant is also expected to have a positive impact on the company's margins.
On the outlook for the sector, Mehta said the economic slowdown has adversely affected demand for paper in India. "However, I would rather think that fundamentals that drive growth for products like paper are strong and remain intact despite the slowdown," he added.
On October 10, 2013, JK Paper closed at Rs 30.30, up Rs 0.95, or 3.24 percent. The 52-week high of the share was Rs 46.80 and the 52-week low was Rs 23.05.
The company's trailing 12-month (TTM) EPS was at Rs 1.83 per share as per the quarter ended June 2013. The stock's price-to-earnings (P/E) ratio was 16.56. The latest book value of the company is Rs 64.08 per share. At current value, the price-to-book value of the company was 0.47.
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