JK Paper -Demand robust, revise earnings upward BUY :: Emkay

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JK Paper

Demand robust, revise earnings upward

BUY

CMP: Rs 51                                       Target Price: Rs 90

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n     Q4FY11 results were in line with estimates with revenue growth of 7% yoy (-7% volume and +14% realisations) to Rs 3.1 bn and APAT growth of -7% yoy to Rs 251 mn

n     EBITDA margins contraction of 60 bps yoy to 19.8% is attributed to high wood, coal & chemicals cost, however margins are expected to improve in FY12

n     Company’s capex plan remains on schedule and capacity expansions would help volume growth. Prices to remain strong owing to buoyant demand

n     We introduce our FY13E EPS of Rs 15.2, +3% yoy, and roll over our price target to FY13E basis with target price of Rs 90. Re-iterate BUY