JK Paper (JKPAPER)

FairStock Score: 26/100 — RISKY

Score breakdown: P/E: 1/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Low debt/equity of 0.37 provides balance sheet cushion
• Sales growth of 8.03% shows top-line resilience
• Promoter holding of 49.63% aligns ownership with minority investors
• P/B of 1.37 is not excessive against book value of ₹277.93
• Modest dividend yield of 1.38% offers some income support

Concerns

• Profit growth down 45.13% with latest quarter net margin only ~1.6% (₹28 Cr on ₹1,763 Cr sales)
• Low ROE of 4.59% and ROCE of 8.63% indicate weak capital efficiency
• Piotroski F-Score of 4/9 and FairStock Score of 27/100 suggest financial stress
• P/E of 22.87 and PEG of 2.85 look expensive on cyclically depressed earnings

AI Analysis

Looking at JK Paper, I start with what I can know: it is a paper maker, a capital-intensive commodity business with little pricing power. The numbers do not give me comfort. Sales grew 8.03%, but profits collapsed 45.13%, leaving ROE at 4.59% and ROCE at 8.63%. In the latest quarter it earned just ₹28 crore on ₹1,763 crore of sales—a margin near 1.6%. That is not a franchise; it is a cyclical grind. The Piotroski score of 4/9 tells me the financial fitness has weakened. On the positive side, debt/equity is only 0.37, so they are not choking on debt, and promoter holding of 49.63% keeps owners interested. Book value is ₹277.93, so at ₹380.75 I pay 1.37 times book, but that premium is only justified by future returns. With ROE at 4.59%, this paper asset is not earning its cost of equity; a Graham buyer would demand a margin of safety. The P/E of 22.87 is meaningless on collapsed earnings—what matters is whether the cycle turns and returns recover. At the 52-week range of ₹304.85 to ₹444.80, the stock sits in the middle, not obviously cheap. Dividend yield 1.38% is modest. I cannot call this a wonderful business. It may be a cyclical rebound candidate, but I avoid guessing turning points. I need evidence of improving margins, stable sales, and higher return on capital before I act. Price is a statistic; value is a stream of future earnings. Right now that stream looks thin and uncertain. So I politely pass. Better to wait for a clear margin of safety and a healthier balance between price and earning power.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer