Pulp Cost Tailwinds in Q2 as BCTMP Plant Ramps
JK Paper enters Q2 with its new Hardwood BCTMP plant now three months operational, driving pulp-cost deflation. Street expects sustained revenue momentum and margin expansion off Q1's strong base.
What to Expect in Q2 FY27
JK Paper posted a strong Q1 FY27 with consolidated revenue of ₹1,987.67 Cr (+13% YoY) and EBITDA of ₹320.90 Cr (+18% YoY). The standout metric: PAT surged 63% to ₹130.4 Cr, driven by volume growth, price realization, and margin accretion. Q2 enters a new phase: the Hardwood BCTMP plant, commissioned June 30, has now run for three months, reducing reliance on costlier imported chemical pulp. This is the key swing factor for Q2 margins.
~₹1,900–1,950 Cr
Q1 ₹1,987 Cr provides the baseline; Q2 may see mild seasonality headwind typical for Jul–Sep, offset partly by volume ramp
~₹290–320 Cr
BCTMP cost deflation the key upside; watch for any pricing pressure or raw-material inflation offset
~15–16%
Q1 was ~16.1%; margin resilience hinges on pulp-cost pass-through and operating leverage
~₹110–140 Cr
Q1 was ₹130.4 Cr; assume broadly flat to up depending on tax/other items and GST outcome
A strong Q2 would show: revenue within or above the ₹1,900–1,950 Cr band, EBITDA margin holding or expanding ≥16%, and PAT tracking ≥₹120 Cr. Tailwinds include pulp cost deflation, improved export realizations, and volume ramp from the BCTMP ramp. A weak Q2 would reveal: revenue <₹1,880 Cr, margin contraction to <14.5% (signaling cost pass-through failure or raw-material shocks), or PAT <₹100 Cr (tax or one-offs). Watch for any commentary on Q3/Q4 demand or CAPEX plans.
On Track for Full-Year Guidance?
No explicit FY27 guidance was published for revenue or EBITDA, but Q1's 13% growth and 18% EBITDA growth set an ambitious bar. The company flagged that comparatives for FY26 were unverified (auditor changed), so FY27 is a de facto fresh-start trajectory. BCTMP commissioning is the signal of intent: management is investing in cost leadership, not margin contraction. Two quarters in, the trajectory is: on-plan if Q2 sustains mid-double-digit revenue growth and holds margins ≥15%. At ₹368.9 (Oct 26), the stock is -42% from ATH (₹638.75) but +21% off the 52-week low, and analyst targets cluster at ₹500 (median, 3 analysts, all Buy/Strong Buy).
Since Last Quarter
1 · BCTMP plant operational (Jun 30, 2026)
Hardwood Bleach Chemical Thermo-Mechanical Pulp plant commissioning now 3+ months in. This is the structural margin lever for FY27+. Q2 will show first full-quarter impact on imported pulp cost reduction.
2 · YPL Enterprises acquires 6.95% stake (Oct 14, 2026)
Via Composite Scheme of Arrangement, YPL Enterprises (1,26,07,662 shares) entered as a 6.95% shareholder. Promoter stake unchanged at 52.94% in latest Q1 filing. This is a significant capital-market event; watch for commentary on synergies or long-term intent.
3 · New President (Paper) appointed (Oct 12, 2026)
Gunjan Dinesh Kumar Shah appointed as President (Paper) and Senior Management. Effective operational change; may signal strategic focus on paper vertical margin/volume expansion.
4 · RWPL (Radhesham Wellpack) acquisition completed (Sep 9, 2026)
Company acquired remaining 20% stake for ₹44.02 Cr, now 100% owner. Specialty packaging play; minor to EBITDA in Q2, but consolidation of platform for future growth.
5 · GST demand notice (Sep 21, 2026)
Assistant Commissioner issued ₹2.53 Cr aggregate GST demand (₹1.27 Cr tax + ₹1.27 Cr penalty) for excess ITC claim from a prior period. Compliance tail-risk; watch for update on appeal/settlement in Q2 MD&A.
6 · Trading window closed (Sep 25, 2026)
Routine: results window closure ahead of result announcement.
The Setup
JK Paper Q2 FY27 is a milestone: first full quarter with BCTMP pulp plant running at scale. Margins are the headline—will the ₹290+ Cr/quarter EBITDA hold, or improve as pulp deflation flows through? Q1's 63% PAT jump was exceptional; sustaining even 30–40% growth in Q2 would signal durable operational leverage, not one-time beats. The GST demand and RWPL consolidation are noise versus this signal.
1 · BCTMP plant utilization and pulp-cost savings
Management commentary on Q2 production run-rate, imported pulp % of input mix, and realized cost savings. This is the inflection: if BCTMP is running >80% capacity and pulp costs are down 10–15% QoQ, margins should expand.
2 · EBITDA margin (%)—hold or expand?
Q1 consolidated EBITDA margin was 16.1%. Expect ≥15.5% in Q2 for on-plan; <15% signals margin pressure (price competition or raw-cost shock). This is the test of the BCTMP thesis.
3 · FY27 full-year guidance and CAPEX/dividend outlook
No formal guidance yet published. Q2 MD&A may hint at FY27 revenue/EBITDA run-rate expectations, RWPL's anticipated contribution, and dividend policy. YPL's entry may influence capital allocation commentary.
JK Paper Q2 FY27 reports Nov 2 as a pulp-cost inflection story: three months of BCTMP plant operation should translate to deflation and margin expansion, or reveal execution risk. Street consensus at ₹500 target implies belief in 55% FY27 earnings growth and sustained margin hold. Q2 earnings and—critically—management's outlook on full-year run-rate and BCTMP ramp will anchor whether that consensus holds or recalibrates. Watch EBITDA margin, pulp cost savings detail, and any guidance signals.
JK Paper: consol PAT +35% YoY to ₹103 Cr on margin gains, -24% QoQ off Q1 peak
PAT +34.75% YoY · revenue +11.95% · margins expanding
₹1,939.04 Cr
+11.95% YoY
₹103.04 Cr
+34.75% YoY
5.26%
+0.9pp YoY
₹5.59
JK Paper's consolidated (primary basis) revenue for Q2 FY27 came in at ₹1,939.04 Cr, up 11.95% YoY against the restated year-ago base of ₹1,732.09 Cr, and up a modest 2.75% QoQ from ₹1,887.17 Cr in Q1 FY27. Net profit for the period (post non-controlling interest and share of associate/JV) was ₹103.04 Cr, up 34.75% YoY from the restated ₹76.47 Cr base — on the pre-restatement comparator of ₹77.88 Cr the growth works out closer to +32.3% — but down 24.38% QoQ from Q1 FY27's ₹136.27 Cr. Basic EPS was ₹5.59 against ₹4.07 restated a year ago and ₹7.18 in the preceding quarter. Standalone PAT, the secondary basis, was ₹84.23 Cr, up 24.74% YoY and down 25.52% QoQ, tracking the same directional pattern as consolidated.
Q2 FY-2027 vs prior quarters
The YoY improvement is a margin story rather than a volume one: consolidated OPM (EBITDA/revenue) rose to 15.52% from 13.82% a year ago as cost of materials consumed grew just 1.7% YoY (₹1,144.71 Cr vs ₹1,125.09 Cr) against 11.95% revenue growth — the company's own filing note attributes this to "better product mix." NPM similarly expanded to 5.31% from 4.42% YoY. Sequentially, though, margins cooled: OPM fell from 17.01% in Q1 FY27 and NPM from 7.22%, driven by a 28.4% QoQ jump in power, fuel & water costs (₹166.39 Cr vs ₹129.59 Cr) and a 34.9% QoQ rise in finance costs (₹53.70 Cr vs ₹39.81 Cr) — the latter likely tied to the debt-funded buyout of the remaining 20% stake in Radheshyam Wellpack (RWPL) for ₹44.02 Cr completed this quarter, making RWPL a wholly owned subsidiary (consolidated cash flow shows ₹56.88 Cr spent on acquisition of subsidiary shares). Segment data corroborates the sequential softness: Paper & Packaging segment PBIT margin eased to 9.30% of segment revenue (₹176.04 Cr / ₹1,893.42 Cr) from 9.84% in Q1 FY27.
The stock went into the print at ₹381.05, down 3.2% over the past month of trading.
For context: this is the second-highest quarterly PAT of the last 6 quarters.
No verified Street consensus estimate for this specific quarter turned up in a search of brokerage previews, so no beat/miss call can be made against external forecasts. Management has also issued no formal guidance or outlook on record for this quarter — the context carries none and the web search found no company-stated targets — so this print stands on its own trend read rather than against a bar the company set. No exceptional items featured in either the current or the restated year-ago quarter, so the YoY growth figures above are already on a clean, like-for-like basis.
W1
Whether consolidated OPM recovers toward Q1 FY27's ~17.01% from the current 15.52% as power/fuel cost pressure eases
W2
Finance cost trajectory following the debt-funded RWPL buyout — Q2 finance cost was ₹53.70 Cr vs ₹39.81 Cr in Q1
W3
Full-quarter consolidation effect of RWPL as a wholly owned subsidiary (acquired mid-quarter) on segment revenue/PBIT next quarter
Consolidated PAT (103.04) = PBT 143.72 - tax 41.62 (=102.10) + share of associate/JV profit 0.94; attributable to owners alone is 101.34 with NCI 1.70. No exceptional items in current or restated year-ago quarter. Company restated Sep-2025 quarter comparatives for the Composite Scheme of Arrangement, so restated YoY base (revenue 1,732.09 / PAT 76.47) differs from our pre-restatement DB record (1,748.53 / 77.88); YoY figures below use the filing's restated comparatives.