Thread by @TYMFinance

JK Paper conducted their concall for Q2 FY 22

Here are the conference call highlights 🧵👇

Business Updates:

• Market share is expected to increase after commissioning of new plant in Surat.
• Post expansion capacity would be 7.6lakh Tonne.
• Realization increase in packaging board (growth of 4-5%) & coated paper (increased by around 1.5%).

Industry:

• Commodity & Energy price has certain impact.
• Raw material of Wood and Pulp has not much impact in the price.
• Global pulp price (mechanical) are down to 570-580 Rs, while prices of chemical pulp is 650&, while at peak it was 850$ (which was not sustainable)

• Global paper price depends on the other input cost and demand and supply scenario.
• This may vary with respect to country to country, with respect to demand.
• Demand in India, has been already back to pre-covid level.

Un-coated paper:

• Before wave 2 there was sudden drop in the price of un-coated paper. These prices were increased every month post wave 2.
• Right now price is back to pre-covid level ~62-63Rs kg.
• Further increase in energy price would lead to increase in price.

Packaging Board:

• Raw Material prices are increase, for which co. has increased the price of around 5% in Q2.
• While prices are increased further in Oct, to be realized in Nov.

Raw Material:
• Manufacturing cost increased by 8-9%, due to increase in coal prices, chemical prices and impact of commodities.
• Col dependence is 40% which is linkage for both the plants, while remaining energy is source from block liquor which is internally produced.

Margins:

• Most of raw material will now be from domestic sourcing.
• Margins are also impacted due to increase in sales at Sirpur plant, where the margins are lower, with respect to standalone level.
• Most of raw material will now be from domestic sourcing.

CAPEX:

• Capex spend was around 2000cr. JK Paper commission capex with the target of 12-14%.
• Standalone capacity utilization is around 110%, while sirpur plant capacity utilization is 77%.

Other:

• Interest expense have come down with re-payment of loan.
• Consolidated net debt of 2700cr would be the peak.
• With upcoming cash flow, co. would is targeting to repay debt of 250-300cr every year, and remaining would be utilized for different means.

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