Positional Call: Buy JK Paper for an upside of 20%

Rudra Shares And Stock Brokers | Jan. 4, 2019, 12:09 p.m.


Having current capacity at 4.55lakh tones, JK paper is all set to commence the additional capacity of 1.38 lakh tones from Sirpur plant in Telangana, to help venture into color paper segment, the very first time by April, 2019. Likewise, will further increase its capacity by adding 1.5 lakh tonnes in the next two years from Gujarat plant stemmed to focus on the packaging board vertical. Both would help to grow revenues at 15% CAGR over next 5 years. Shave of paper production in China as a result of environmental concerns, levy of anti-dumping duty on  uncoated copier paper imports from Indonesia, Thailand and Singapore, is expected to stem in a call for paper. We estimate P/E of FY19E at around 8x, share price turns around to be Rs. 180.

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