Crisil Ratings assigns 'AA' rating to debt instrument of JK Paper with 'stable' outlook

Further, Crisil Ratings has reaffirmed its ‘Crisil AA/Stable/Crisil A1+’ ratings on the bank facilities, fixed deposits, existing NCDs and commercial paper programmes of the company. Crisil Ratings stated that the ratings continue to reflect JKPL’s healthy business risk profile, as indicated by strong market position and operating efficiency. The company is a market leader in the writing and printing paper (WPP) industry and is one of the largest players in the organised packaging board and corrugated box segments. JKPL acquired Radheshyam Wellpack (RWPL) in fiscal 2025 and announced acquisition of Borkar Packaging (BPPL) in the current fiscal to strengthen its market position. JKPL’s superior market reach and dealer network enhances the business profile further. Operating efficiency is supported by capacity utilisation of above 100% and industry-leading operating profitability. The ratings also factor in the robust financial risk profile, aided by healthy cash accrual. These strengths are partially offset by susceptibility to cyclicality inherent in the paper industry. The company is planning capital expenditure (capex) of Rs 750-800 crore during fiscal 2026, which includes Rs 600-650 crore capex for a Bleached Chemi-ThermoMechanical Pulp (BCTMP) mill and regular maintenance capex of Rs 100-150 crore. The company is expected to fund the capex with a mixture of debt and equity. However, despite the addition of debt, leverage ratios are expected to remain comfortable. JK Paper has three manufacturing plants (with total capacity of 761,000 tonne per annum), at Songadh, Gujarat; Rayagada, Odisha; and Sirpur Paper Mills plant in Telangana. The Songadh plant produces copier paper and paper boards, the Rayagada unit produces copier and coated paper and the Sirpur plant produces paper and paper boards. For the three months ended June 30, 2025, net profit was Rs 85 crore on sales of Rs 1,674 crore, against Rs 141 crore and Rs 1,714 crore, respectively, for the corresponding period of the previous fiscal. The scrip shed 0.30% to trade at Rs 388.35 on the BSE today.