Shares of JK Paper traded 4 per cent higher at Rs 435.90 on the BSE in Tuesday’s intra-day trade after the company acquied a majority stake in Horizon Packs and Securipax Packaging.
JK Paper has entered into an agreement for the acquisition of 85 per cent shares of Horizon Packs (HPPL) and Securipax Packaging (SPPL). The balance 15 per cent stake will be bought within a period of 3 years, the paper and packaging board company said in a press release.
HPPL and SPPL together are India’s largest Corrugated Packaging manufacturers with seven (7) plants across the country. In FY 2021-22, HPPL and SPPL had consolidated revenue of Rs 832 crore. Corrugated Packaging is a rapidly growing segment in the Indian Paper & Packaging industry driven by growth in end-use industries such as food & beverage, FMCG, etc., the company said.
The shift in consumer preferences are driving demand for superior quality, eco-friendly packaging. This acquisition gives us an opportunity to benefit from the existing strengths of HPPL and SPPL. HPPL and SPPL’s customers, employees, vendors and partners will benefit from JK Paper’s strong manufacturing knowledge and experience, its high standards in operational excellence, financial management and corporate governance, the management of JK Paper said.
In the past one month, the stock of JK Paper has outperformed the market by surging 13 per cent, as compared to 3 per cent rise in the S&P BSE Sensex. In past one year, it zoomed 105 per cent on back of strong earnings. In comparison, the benchmark index has rallied 12 per cent during the same period. The stock had hit a record high of Rs 450 on August 17, 2022.
For the half year ended September 30, 2022, JK Paper recorded a consolidated turnover of Rs 3,231 crore (up 88 per cent), EBITDA of Rs 1,045 crore (up 118 per cent) and profit after tax (PAT) of Rs 586 crore (up 164 per cent) which exceeds last year full year PAT in the first six months of this year.
The company said, it was able to deliver an improved performance on a quarter to quarter and YoY basis due to growth in volume driven by ramp up of new Packaging Board capacity coupled with overall better realisation despite adverse impact of higher input costs. The finance cost was also lower on account of effective working capital management and reduction in interest rate through negotiation, it added.