Credit ratings agency CRISIL upgraded its ratings on various financial instruments of JK Paper (JKPL).
The JKPL scrip was currently trading 1.67% higher at Rs 128.15. It has traded in the range of Rs 127.80 and Rs 129.90 so far during the day.
CRISIL has upgraded its ratings on the long-term bank facilities, non-convertible debentures, and fixed deposit programme of JK Paper (JKPL) to 'CRISIL AA-/FAA/Stable' from 'CRISIL A+/FAA-/Positive'.
It reaffirmed the rating on the short-term bank facility and commercial paper programme at 'CRISIL A1+', the company said in an exchange filing after market hours yesterday, 18 December 2019.
CRISIL believes JKPL's credit risk profile will remain stable over the medium term, backed by healthy margin and debt protection metrics.
The upgrade reflects sustained improvement in cost and operational efficiency coupled with healthy realisations, resulting in robust better-than-expected profitability. The short-term rating has been reaffirmed due to strong liquidity and ample cash and cash equivalents, undrawn bank lines, and healthy accrual. CRISIL expects the company to maintain minimum cash balance of about Rs 200 crore to meet any contingencies.
The paper maker's consolidated net profit declined 2.7% to Rs 123.66 crore on a 10.9% increase in net sales to Rs 790.62 crore in Q2 September 2019 over Q2 September 2018.
JK Paper has two large integrated paper manufacturing units - one in Odisha and the other in Gujarat with a combined capacity of 4,55,000 tonnes per annum (TPA). It is the market leader in branded copier paper segment and among the top two players in coated paper and high-end packaging boards.
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