Accumulate JK Paper - Emkay

JK Paper
Reco: ACCUMULATE
CMP: Rs 36
Target Price: Rs 48

Muted quarter, maintain Accumulate

- Q3FY12 results were below est due to continued pressure on margins led by reduced availability of coal & higher cost of raw materials

- Sales of Rs 3.2bn, +4% yoy were in line with est. However, EBITDA margins at 9.3% were lower than est of 12%. Co reported APAT of Rs 74mn lower than est of Rs 85mn

- Co has recently hiked paper prices by 3-4%. Though pulp prices have also started softening, however linkage coal availability & increase in raw material costs remain concern

- Reduce EPS estimates for FY12 by 4% to Rs 3.6. Maintain Accumulate with target price of Rs 48.

Source : Equity Bulls

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