JK Paper shares nosedive 11% after profit falls sharply by 72% YoY in Q3

Over the past three months, this small-cap stock has plummeted over 21 percent

Shares of JK Paper nosedived 11 percent to Rs 340 apiece on January 30, following the company's lackluster third-quarter (Q3FY25) results.

Over the past three months, this small-cap stock has plummeted over 21 percent, in stark contrast to the benchmark Nifty 50 index, which saw a comparatively modest 4 percent dip. Previously, JK Paper had hit its 52-week low of Rs 319 on March 27, 2024, and its 52-week high of Rs 639 on July 2, 2024.

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The company reported a steep 72 percent year-on-year (YoY) decline in net profit, which plunged to Rs 65 crore in Q3FY25 from Rs 235 crore in the same period last year. Revenue from operations also took a hit, slipping 4.4 percent YoY to Rs 1,631 crore, while EBITDA stood at Rs 189 crore.

Total expenses for the quarter climbed slightly to Rs 1,569.53 crore from Rs 1,544.77 crore in the preceding quarter. Finance costs came in at Rs 80.23 crore, while depreciation expenses totaled Rs 113.55 crore.

The management attributed Q3 weakness to sharp rise in import prices, which affected sales volumes and realisation in paper and board segment. This coupled with continuing high wood costs has resulted in a significant fall in profits during the quarter.

In a strategic move, JK Paper’s board has greenlit the acquisition of a majority stake in Quadragen Vethealth. The company has signed a share purchase and shareholders’ agreement to acquire an initial 65 percent stake upfront, with the remaining 35 percent set to be acquired within four years.

Quadragen Vethealth specializes in the production, marketing, and export of Animal Nutrition Products, including feed additives and growth enhancers.

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