New Delhi, Feb 18: In spite of an expanding digital economy, Indian paper companies – JK Paper, West Coast Paper, and International Paper, among others – are set to script their most profitable performance in the current financial year. Profits at these companies have already surpassed the FY17 annual numbers in the first nine months of the current financial year thanks to improved efficiencies, favourable pricing environment, and a reduction in interest expenses.
JK Paper has reported a net profit of Rs 1.86 billion during the April-December period of FY18, growing 75 per cent year-on-year (YoY). This is more than the profit of Rs 1.62 billion it earned in FY17. Kolkata-based West Coast Paper earned Rs 1.44 billion in the first nine months of this financial year, growing 85 per cent YoY. The company has surpassed the profit of Rs 1.28 billion it earned in FY17. The story is similar in many other paper companies. Share prices of these companies have surged to a new high last month. Interestingly, the revenue growth has been almost flat YoY for top paper makers as manufacturers are operating at hundred per cent capacity for over a year.
Saurabh Bangur, vice-chairman at West Coast Paper, said the market sentiment has improved. “Prices of wood, which form 40-45 per cent of raw material cost, have been at a comfortable level in the past few quarters. We have been able to increase prices of paper by 2-2.5 per cent since December following an increase in costs of crude oil and chemicals.”