Is it a right time to buy JK paper share? Let us do some simple calculations to have an idea when to buy and when to sell the stock of JK Paper.

Buy Range:-  200-250  

Target:- 800 by 2030

JK Paper Share Price Today

Here we will try to predict JK Paper share price target scientifically by doing some calculations. JK Paper has made the investors money by 2.5 times in just 2 years from 2021. The company has almost doubled its sales and profits from 2021 to 2022 and further more in TTM.

Year	Share price (Bear Case)	Share Price (Base Case)	Share Price (Bull Case)
2022	183	275	336
2023	205	308	376
2024	230	345	421
2025	257	386	472
2026	288	432	528
2027	323	484	592
2028	362	542	663
2029	405	607	742
2030	454	680	832

Calculating JK Paper Share Price Target

Assumed Sales Growth

• Over the last 10 years the compounded sales growth of the company has been 12%, 9% in 5 years, 7% in 5 years with 72% in TTM.
• It has increased its capacity from 45K TPA to 59K TPA after it acquired Sirpur Paper Mill.
• Assuming the company will keep growing its sales like this for years to come, we can project its future sales.
• Assumed Sales Growth = 12%.

Net Profit Margin

• The Company is working at an Operating profit margin of 34%.
• Interest , depreciation needs to be deducted from the Operating Profit and other income is added to it.
• EPS is calculated on the basis of Net  Profits. So we need to calculate Net Profit Margin, so that we can use it to calculate Projected Profits from our Projected Sales.
• Net Profit Margin = (Net Profit X 100) / Sales

	Mar-18	Mar-19	Mar-20	Mar-21	Mar-22	TTM
Sales	2,844	3,257	3,060	2,751	3,969	6,057
Net Profit	261	425	468	237	544	1,095
Net Profit Margin	9	13	15	9	14	18

• Average of Net Profit Margin from 2018to TTM comes out to be 13%.
• Net Profit Margin = 13%

PE

1. Base Case – The company JK Paper trades at variety of PE from 2.8 to 16. Medium PE  being 9 . So let us assume that PE in base case, i.e. when the market is neither too bullish nor too bearish , it will give it a PE of 9
2. Bear Case – Since in market, share prices keeps going up and down despite good results, lets take a case where market is negative about JK Paper. Lets assume there is some bad news like change in management, some consignment getting delayed or any bad news. Then suddenly the market will start behaving poorly and the share prices of JK Paper will start falling down. In such case the market will give it low PE , lets take it 6.
3. Bull Case – Good News always triggers rise in share prices. Lets assume the markets are bullish for JK Paper and give it high valuations with PE as 11.

             Base Case – 9

             Bear Case – 6

             Bull Case –  11

Number of Shares

The company has 16.9 Cr. of shares. Data taken from www.screener.com.

Read More:- Stocks to buy now for short term in 2023

Calculating JK Paper Projected Sales and Net Profit

• In order to predict the share price of JK Paper, the first step is to predict its future sales and then the future profits.
• Projected Sales (Next Year)= Sales Current Year + X% of Sales Current Year,         where X= Assumed Sales Growth.

Eg:-  Projected Sales 2023 = Sales 2022 + 12% Sales 2022.

• Projected Profit = Projected Sales X Net Profit Margin
• Historic data can be fetched from www.screener.com
• Although we are using same Net Profit Margin for calculation for all the years but we should remember that when Sales increases, Profit donot increase by same rate but much more than that.

S.no.	Year	Projected Sales ( In Cr.)	Projected Net Profit ( In Cr.)
1	2022	3969	516
2	2023	4445	578
3	2024	4979	647
4	2025	5576	725
5	2026	6245	812
6	2027	6995	909
7	2028	7834	1018
8	2029	8774	1141
9	2030	9827	1278

JK Paper Share Price Target Base Case

• Considering that the company keeps doing the business in the same way it is doing.
• The company is doing its business in a usual way.
• There is nothing very good or bad going on in company’s financial.
• In such case the market is giving it a median PE of 9.
• Market Capitalization = Projected Profits X Base PE.
• Share Price = Market Capitalization / No. of Shares

S.no.	Year	PE (base case)	Mcap ( Base Case) ( In Cr.)	Share price (Base Case)
1	2022	9	4644	275
2	2023	9	5201	308
3	2024	9	5825	345
4	2025	9	6524	386
5	2026	9	7307	432
6	2027	9	8184	484
7	2028	9	9166	542
8	2029	9	10266	607
9	2030	9	11498	680

JK Paper Share Price Target Bear Case

• With decreased sales or Margins in any quarter can lead to decrease in share price.
• The market becomes negative about growth of the company and starts giving it a poor PE of lets say 6 .
• In such case , the targets of JK Paper is as follows.

S. No.	Year	PE (Bear Case)	Mcap (Bear Case) ( In Cr.)	Share Price (Bear Case)
1	2022	6	3096	183
2	2023	6	3467	205
3	2024	6	3883	230
4	2025	6	4349	257
5	2026	6	4871	288
6	2027	6	5456	323
7	2028	6	6111	362
8	2029	6	6844	405
9	2030	6	7665	454

JK Paper Share Price Target Bull Case

• A positive news, a very big order will trigger the share market to be optimistic about it thereby giving it higher valuations.
• Lets assume the market is giving it a PE of atleast 11 to it.
•  Although the company has got a PE of 16 in the past, but that is an extreme case.
• Lets calculate on the basis of 11 PE.

S.no.	Year	PE (Bull Case)	Mcap (Bull Case) ( In Cr.)	Share Price (Bull Case)
1	2022	11	5676	336
2	2023	11	6357	376
3	2024	11	7120	421
4	2025	11	7974	472
5	2026	11	8931	528
6	2027	11	10002	592
7	2028	11	11203	663
8	2029	11	12547	742
9	2030	11	14053	832

JK Paper Share Price Target 2023

Year	Share price (Bear Case)	Share Price (Base Case)	Share Price (Bull Case)
2023	205	308	376

• The company has posted highest ever Sales and Highest ever profits in Mar’ 22 and TTM, thats why it is trading near its life time high justifying the bull case targets right now.
• The company has a higher Debt to Equity ratio of 0.86% because of which a lot of its profit goes into the payment of interest.
• The company is giving interest of Rs 150-190 Cr. per year. If this debt is paid off the Net Profits of the company can increase considerably.
• JK Paper has a good ROCE of 15.9 % and has shown a profit growth of 118% this year.

JK Paper Share Price Target 2024

Year	Share price (Bear Case)	Share Price (Base Case)	Share Price (Bull Case)
2024	230	345	421

• JK Paper has managed to increase its sales, Operating Profits, Net Profits on QoQ as well as YoY basis so far.
• It Is selling its product through brands like JK copier,  JK easy copier,  JK Sparke,  JK cedar,  JK Max, JK Excel Bond etc. In this segment it has a market share of 24%.
• JK paper has a wide distribution network which reduces the service time to the customers.

Read:-Biocon Share Price Target

JK Paper Share Price Target 2025

Year	Share price (Bear Case)	Share Price (Base Case)	Share Price (Bull Case)
2025	257	386	472

• JK paper has a global presence in 62 countries of USA, Europe,  Middle East, Asia etc.
• The company has increased it is Reserves from 511 CR to 3324 CR.
•  It’s sales have increased five times from 1200 CR in March’11 to  6000 CR  TTM.
•  The company has invested And amount of Rs. 115 CR as CWIP.

 Read:- Nippon India Share Price Target

JK Paper Share Price Target 2030

Year	Share price (Bear Case)	Share Price (Base Case)	Share Price (Bull Case)
2030	454	680	832

• The cash flow has always been positive and in accordance with the net profits.
•  the promoters have increased their shareholding from 49.36% to 51.4% from June to September quarter 2020.
• When  the CWIP would finish ,  their  would be enhanced sales and profits for the company which will be reflected in the share price.

Read:- Tata Elxsi Share Price Target

Conclusion

• Here was an attempt to predict the share prices of JK paper till 2030.
•  We tried to assume the sales and profits the company would make and the way the market is going to behave.
• These share price predictions may or may not turn right.
•  Investors could use these figures to invest in this company during various stages of time.
•  Bear case in a particular year could be used as an entry  point and whenever the Bull Case  targets or achieved,  investors could exit.

FAQ

Other Small Cap stocks worth investing right now are:-

Indigo Paints,

Lux Industries,

Vaibhav Global.

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Disclaimer- All investments and trading in the stock market involve risk. Any decision to place a trade in the financial markets, including trading in stock should only be made after thorough research. Trading strategies or related information mentioned in the article is for informational purposes only. Use your due diligence before investing. These are just predictions. They may or may not be true.