So good evening, everyone. Welcome to the Q4 FY23 earnings conference call of JK Paper Limited. As a reminder, all the participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I'd like to welcome Shri AS Mehta, President and Director, Shri Veerappan KR, Chief Financial Officer, Shri Ashok Gupta, Senior VP Finance and Accounts of JK Paper. I thank you for giving us this opportunity to host the earnings call. I shall now hand over the call to the management for the opening remarks. Over to you, sir. Thank you, Archanaj i. I will request Mr. Veerappan to brief the financials, then Mr. Mehta. You wanna put the presentation? Presentation incorrect. Now it's correct. Archanaj i, that we have already uploaded the presentation, so we will not go through the presentation. Can we directly go to the financials if? Sure, sir. Sure. Highlights. Let's do it. Yeah, highlights are actually. The previous slide. Yes. Previous slide. Previous. Yeah, good evening all. Of course the presentation, as Ashok mentioned, presentation has been already uploaded. I am sure all of you have seen. We thought we'll just take 5, 10 minutes to just briefly go through on the important points, and then we'll open the session for the question answers. JK Papers, this performance for the last year, 2022, 2023, as we had, has been a great year. You can see from the results it's been a phenomenal year. Just a few points. The capacity utilization was at 103.9% against 100% last year. The turnover is the highest ever, which is there in the results, published results. One important thing which happened last year was acquisition of two companies in corrugated packaging business. Both the companies put together, they have around seven plants across the country. That's been one fill in the gap in the last year. Of course, the thrust on the plantation activities continues. Last year alone, around 8.32 crore saplings have been planted covering 55,700 acres. We continue to be the wood and carbon positive company. Just one information I would like to make. We are proud to say that the company has covered so far around 6 lakh acres of plantation, and we have planted already over 110 crore saplings till date, right from the beginning. Last year, few new products have been introduced, like JK Eco-green, Purefil and Tuff Freeze P2P. As regards credit rating, our, I think JK Paper is the first company to have upgraded, you know, getting into the AA rating. From AA- stable it got upgraded to AA. Our subsidiary, by both the agencies, CRISIL as well as India Ratings, and our subsidiary Sirpur, has also been upgraded 2 notches in this year, from A positive to AA- positive. The financials are there in front of you. The volume details are there. The revenue and PBT, EBITDA margin, fourth quarter was around 29.8%, full year 33.1%. There is an increase of 5.6% over last year. This gives the yearly trend, and this year has been a phenomenal year. From INR 4,244 crores we have moved to INR 6,772 crores. You can see the rise in EBITDA also from INR 1,122 crores to INR 2,184 crores. So, with PBT and PAT. For the first time last year we did INR 544 crore PAT delivered, and now it's more than double in one year. It's already means. Of course, we have crossed the INR 1,000 crore milestone. Not only INR 1,000, we have crossed INR 1,200 crores. INR 1,208 is the PAT delivered last year. These are the continuous improvements you can see on the various parameters in terms of the interest rates and ROC. We are right now at 21.1% post-tax. The borrowing situation, the cash situation has been healthy. We have been reducing the net debt constantly. At this point of time, at a consolidated level, we are at around INR 1,900 crores of net debt. The net debt to equity is less than 0.5, and net debt to EBITDA is less than 0.1. We are at 0.89. These are the volume jumps. Volume has already gone from, right from 2005 you see the journey. From 2020, there has been a significant jump. Yes. Now let's just compare. Yeah. I think rest, by and large, we have covered. Mehta ji, you would like to say anything more before we open the question answer? Sure, sure. You want to continue the presentation? Yeah, we can continue or we can do it. We can stop this. I'll request Mr. Mehta ji to say a few words, and then we can open the session for question answers. Very good afternoon, everybody, thanks for joining this call. In fact, the year 2022-2023 has been very favorable market as well as a good year for the paper industry. I would say that the 2022-2023 has been the outlier year for the industry in many, many ways. The demand was robust. The global pulp prices were very high. The integrated player, those are in the country, most player are the integrated player. Since the pulp prices were higher, paper prices globally were higher, we got the advantage of the higher NSR. The volume NSR both played a positive factor for the much improved performance during the year. During the year, our new packaging board capacity, which we could utilize up to 90% because the strength of the market and the demand in the market. That also played a significant role. Also year in fact from a Sirpur point of view, because after acquisition, this is the second year of the full running of the plant and there also we could produce close to 90% of the capacity. When the market was favorable, in fact, whatever we produced we could sell at a good price. That's the reason that at Sirpur we clocked somewhere around INR 300 crore plus the PAT, which is phenomenal. I mean, if you think about a company of a 130,000 ton of capacity. When there is a sentiment about replacing the plastic, so there is a good moment as far as we are concerned, for the packaging material. This is on the paper side. Of course, there were challenges because of the commodity prices, because of the energy prices, but somehow we could recover from the market and we were fairly comfortable. Also during the year, all the operating parameters also we did very good. The acquisition, the corrugation business, because we entered into this business, so our Ludhiana plant direction and commissioning were as per schedule. The top of it, the icing on the cake was the acquisition of the India number one corrugation, these two companies put together. In the quarter four where this was consolidated in our result, broadly they were in line with what was projected. This is all about and yes the market is likely to be volatile in coming days, but the strength of JK Paper and the team what we have, we should outperform the industry again in time to come. Thank you. Now I mean, we can address all the question and the house can be open. Sure. Thank you so much, sir, for this presentation and your words. Let's start the Q&A session. We have Harsh Shah as the first speaker. Harsh, please go ahead. Yeah. Thank you very much. Congratulations to the team for such a successful year. I just have few questions on the Q4 results and then, I have couple of questions on the way going forward. Firstly, on Q4, can you just explain, in terms of the margin variations that we are seeing on a quarter-on-quarter basis? Firstly on gross margin and I guess there is a bit of high elevated other expenses. Was there any one-off in this, quarter? Okay. I mean, I would suggest that please put all your questions so that those can be addressed in one go. Sure. Sure, sir. Second is, again, towards the Q4 result only. You mentioned that we have acquired both the corrugated packaging companies in this year. Is there any numbers that you can give, like in terms of this quarter? Has that, those two companies contributed anything to your revenue and also to your margins, bottom line, etcetera? Those were the two questions that I had on Q4 results. Just going forward, in one of the interviews, Mr. Veerappan said that our company intends to achieve a INR 7,000 crore of turnover next year. Can you just also help us understand, of course there has been volatility in bulk prices, we are seeing that globally, but in terms of margins, you know, where you will be profitability, we have clocked INR 1,200 crores. Will it be similar? Will it be lower? If, if lower, you know, what is the variation that internally you guys are planning? Last question, and that is again on strategy level is in terms of scaling up the businesses that you have acquired, what is the plan going forward? How big can it this be businesses and how a consolidated JK Paper will look like after full integration of these two acquired businesses also? These were the broad four questions I had. Yeah. Your question on Q4 margin variation, I think Kabir mentioned, Mehta ji also mentioned. There has been a little bit of a price drop in the coated paper and the packaging board. As far as the other expenses are concerned, I think if I'm not wrong, we are seeing the consolidated number. Consolidated this time we have the two companies, Horizon Packs and Securipax Packaging expenses also added in that expenses. That's why compared to last year it looks higher. Otherwise it's just the consolidation impact. As far as the numbers on corrugated packaging business is concerned, in Q4 we have delivered around INR 190 crores top line. Overall, if you see in the consolidation, it's around INR 228 crores top line or INR 231 crores. Bottom line will be in the range of 23 crore. All right. As far as your question on the turnover or outlook for 2023, 2024 and also the corrugation business. I would say that on a full year consolidation basis, the corrugation business should give close to 1,000-1,100 crore of turnover and EBITDA of 100-120 crore, depending on what kind of a kraft paper price remains in the market in coming year. That's one part. If we consolidate on a full year for kraft, I mean, the corrugation business and the paper and packaging board business, we should be close to 7,000-7,500 crore as our top line. Does it answer? Consolidated margins, sir, like consolidated profitability, the EBITDA. Margin, it is difficult at this stage because, see please understand, corrugation business will give EBITDA margin of something around 10%-16%, depending on which period are we in. Sometime the right now, if you ask me, the EBITDA margin is 12%-14% in this industry. In time to come, when you utilize the capacity better, it could be 12%-16% EBITDA in the corrugation business. The paper business, I would say that the price volatility will be there and commodity volatility will remain in 2023, 2024. It's very difficult, but I can only tell you that the margin of 2022, 2023 will not be there in 2023, 2024. Understood, sir. That was very helpful. Just lastly, one of the things that you mentioned earlier, if we have to going forward see JK Paper standalone, that will be a pure paper business and consolidated will have packaging. Is that the right way to see or how Sirpur will be accounted for? No, no. Sirpur is also consolidated, and the Sirpur is purely a paper company, right? The JK Paper is also paper and packaging board. The consolidated, certainly you will have a corrugation business. That's very simple. I mean, something around INR 6,000 crore plus will come from paper and INR 1,100-1,200 crore will come from the corrugation business. Understood, sir. That was very helpful. Thank you and all the very best. Thank you. Thank you, Harsh. Next we have Deepak Lalwani. Please go ahead. Yeah. Hi. Thank you gentlemen for taking the questions. So my first question, if I heard you right, the corrugated paper contribution in this quarter was INR 190 crore top line and INR 23 crore PAT, right? No, no. I mentioned about EBITDA. INR 190 crore top line in Q4 around INR 18 crores EBITDA in Q4. Overall year, we had a December also some 20 days. overall year it's around INR 23 crores EBITDA. Okay. What will be the contribution to PAT? EBITDA, PAT. Contribution to PAT is about INR 4 crore. INR 4 crores. Okay. Sir, since, you know, although we are early in this business, any learnings you would want to share with us, and the way for this business going forward as to how you would, you know, sort of ramp up and, you know, come to the profitability guidance that you have? See, the corrugation business as you rightly said, that it is too early for us because we are also learning this business. Every day there is some new learning for us in this business. I would say that we have a good team in that business. The erstwhile promoter, they are still continuing with us and they are contributing in a very, very positive manner. We have a good mix of team. Some of the people coming from JK Paper business and the existing or the erstwhile promoter, they are continuing. Also we have recruited some more people in the corrugation business. Going forward, there will be a good mix of professional people and also those older people. I am confident that we have a good team and this business should do better in time to come. See, the learning is that in that trade you need to have a very strong relationship with the customer. Once you have a good customer acquisition, your capacity utilization goes up and that adds good value for the business. Right. Got it, sir. In your comments to the earlier participant, you mentioned that there's a correction in the coated and the packaging prices. We also see that, you know, the China pulp prices have corrected quite a bit. Any short-term guidance if you would want to give on the realization and, you know, any cost levers. Do we have any cost levers to sort of protect our EBITDA per ton that we make? Any comments on that? I would say that the paper industry EBITDA margin, I would say that if it remains in the band of 20%-25%, it is a decent EBITDA margin. That gives a healthy ROC also, if the EBITDA is 20%-25%. I would say that right now also, even the coated paper prices have come down, packaging board prices have come down, but at the same time, the pulp required, mechanical pulp required for packaging board has also come down sharply. I mean, from a $900 a ton, it has already touched $500 a ton. That also gives an advantage. Mm-hmm. Going forward, if we are able to have something around 25% margin, that's a very decent margin. We should be happy with that kind of a margin. As I said that the 2022 to 2023 has been an outlier year, and we can't expect a kind of a margin of a 35% or a 40% margin in time to come. Right. Got it. How much has been the price drop? If you can give us the range in both the segments. The coated paper price drop has been close to 20%. The packaging board prices have also come down by 10%-12%. Sure. Sure. Sir, if you can indicate, the utilization levels, in our packaging plant and the Sirpur unit and any guidance, you know, for the volume growth in FY 2024. In both these plants are operating at 90% packaging board new machine as well as the Sirpur. Mm-hmm. In fact, we have already touched some 90%+ now. Hopefully in this year, maybe after the second quarter, we should be operating at 100% at both the facilities. Okay. Right. Got it. After this price drop, do you expect any further correction or, do you think for the next two, three quarters we are done with this sort of correction? See, very difficult at this stage because entirely it will depend upon the global pulp price trend, I know. Slightly this may be higher pulp prices later on because pulp price anything below $550 is not right price for the pulp manufacturer because their costs of production and the other issues. A sustainable pulp prices would be in the band of $525-$575 or $600. If at this level, it's not a sustainable price level for the pulp manufacturer also. If the pulp prices goes up again, then there will be opportunity for a stable pro- output prices, as well as there may be some opportunity to correct the prices again northward. It will remain very volatile in this year, 2023, 2024. Understood, sir. Sir, lastly, on your balance sheet, any targets you have on the debt repayment for 2024? The normal repayment, whatever that, we have scheduled, that will continue. We are also exploring that if some high cost debt can be prepaid. On an average, the repayment will be almost INR 250 crores. INR 250. INR 500 crores. Consolidated level around INR 500+. INR 500 crores - INR 540 crores will be repaid. That's the repayment normal. Certainly that we are keeping that interest cost also in mind. Wherever we find that opportunity to prepay that, we will continue to do so. Sure. Got it. I have more question, but I'll join back in the queue. Thank you. Thank you, Mr. Lalwani. Next we have, Amit Doshi from Care PMS. Sir, please go ahead. Yeah. Sir, you mentioned yesterday in an interview that this wood procurement cost is increasing. Can you just share some thoughts around that? What is it and how it's impacting us? All right. See, the wood procurement cost is increasing because the wood requirement has gone up because of two factors. One is the MDF and the plywood. When the construction industry is doing better, then the requirement of and the demand of plywood and MDF goes higher, and they need the additional wood, and since they don't do plantation, the pressure comes on the plantation done by the paper industry. In fact, in northern part of the country as well as in the western part of the country, prices moved up substantially. Later on, the impact also was felt in the southern part of the country. There is an increase in the wood cost. At the same time also, there is a linkage with the MSP announced for the food grains. Because the farmer will always compare their income stream with the other crops. If they get better reward in doing a cotton or a paddy or a wheat or sugarcane or any other crop, they will have a shift from plantation to the crop. We need to keep all the time in mind that what kind of a revenue I am able to generate for a farmer. That is why there is an increase in the wood cost. Yes, wood cost, increase will have impact on the profitability. In fact, last year alone, in the western part of the country, price increase was substantial. It was more than 25%. In the northern part and southern part, it was decent. It was something around 6%, 7% or so. We are... It was okay, because the output prices we could increase and we could recover from the market. This was fine. See the present raw material cost also and present prices in the market, I mean, these are all manageable and fine. No issue at all at this point of time. If the output prices goes much below, it will start hitting the paper industry. Okay. Got it. Got it. Sir, in terms of our NSR, you know, what has been our NSR for Q4 and Q3? This question is because we don't have that top line breakup in the PPT that you have given, so we are not able to understand. Second, the question linked to it is this. The global pulp price you mentioned came down from $900 in August 2022 to say $500 now, which is not sustainable, but broadly how they are linked. If the global pulp prices are down by 40%, would our NSRs also come similarly down by 40% or what? If you can just explain that linkage as well, along with the numbers. Global pulp prices and the NSR, there is not a direct link. Sometime. See, in the long run, there has to be a linkage between a pulp price and a paper price. You understand that many a times that linkage is broken because ultimately it is the demand and supply of the output, not the pulp. If the demand and supply of the paper is fairly balanced, or if the demand is more than the supply, then irrespective of the pulp price, the paper price would be different. At the same time, if the supply is more and demand is less, irrespective of the pulp price, the paper prices will be lower. That we have seen in the past also. Our general understanding of the paper industry is that if the pulp is X, the paper prices should be $250 x plus. This is a general understanding. If the long term, the trend, if somebody plot the long term, I mean, you will find a delta of $200-$250 depending on the energy cost. At the current energy cost, the delta can be as high as $300. If the pulp price is $500, paper prices should be in the band of $800. As long as the demand supply again, this will play a role. That's the factor. Okay. Okay. If you can share NSR of Q4 versus December? I think the NSR we don't share because it is to my mind, this is the number I don't want to talk on the NSR, because this is one area where we want to be slightly. Which Saroj also indicated about the trend. I think that should be sufficient enough because it is a mix and as well as various combination into that. Let us go by that trend. Sure. Sure, sure. Sir, regarding corrugated business, this Ludhiana plant, when it is likely to, you know, come on stream and, you know, kind of, contribute to our top line, bottom line. In terms of the... so the raw material procurement chain that we... such a strong chain that we have in our paper business. In corrugated, how comfortable we are in terms of our raw material availability and, you know, stuff like that? In the Ludhiana plant, the trials are going on because you understand that it takes time because erection and commissioning were there. It was done sometime in October, November, December. Thereafter, the trials were going on because sometimes it takes time because we were new. Also the workers we recruited, they were untrained people. We were training the workers. The machine supplier, they were also stabilizing the machine. Broadly now, some part is stable. There are still the teething issues bothering us. Hopefully by next month, we should be able to stabilize the machines. Also one major equipment which was delayed because of the zero-COVID policy China. Some supplies from China to the machine supplier were impacted. In fact, we are likely to get that machine sometime in June. Once that machine is installed, then only we will get a sizable production from Ludhiana facility. Hopefully in next 2, 3 months' time, we should be up and running the Ludhiana plant at a decent level. Okay. Okay, okay. Sir, you mentioned about INR 540 crore of debt repayment. I believe even if we have, say, a 20% margin next year with INR 7,000 crore top line, we will have close to INR 1,000 crore or plus cash generation. So what could be a priority in terms of, you know, utilization of that additional INR 450 crore of cash? I mean, presuming things happen this way. Building the war chest so that in future we can do something more. Okay. Okay, okay. Got it. Yeah, I think I have more, but I think I'll join the queue. Thank you so much, and wish you all the very best, and really appreciate the higher dividend that you announced. Thank you. Thank you, Mr. Doshi. Next we have Tushar Verma. Sir, please go ahead. Yeah. Hi, sir. Very good afternoon. Hi. Actually, I have three questions in total. My first question is, what is the current prices of paper board and uncoated paper as compared to Q4 FY 23, to average of Q4 FY 23 actually. My second question is, what is the reason for the sharp increase in finance costs from Q2 to Q4? That is, we can see from INR 36 crore to INR 63 crore respectively. My last and final question is, sir, why are we not buying back the shares? Company is generating so much of cash and share value is so low. Thank you, sir. That's all for me, sir. Finance cost I can say. Go on. See, as far as the finance cost is concerned, we have a Forex ECB loan of around INR 80-85 million, and we do as per the We need to do a reinstatement of these liabilities. 30 at September the Euro rupee was at INR 80 rupees 11 paise, and 31st March it has gone up to 89.61. That's the reason that reinstatement liability has been booked. It's more of a book entry. If you see the loan tenure, we are by and large, there's not much of a gain or loss. Yeah, period to period based on accounting entry, based on Q2 to Q4, there is a book. You have to calculate considering the whatever that we have reported as interest figure versus that whatever that average loan outstanding. You will get the correct picture of that, what is that average rate of interest, which comes to close to 7.4 or 7.5. Right. There was one more on price. Yes. He asked coated paper price. As I said that the coated paper and the packaging board price drop, I have said. As I said that the NSR product wise, we don't want to give in the public domain because we don't publish. This is one part. Any other, I mean, was there any other- Future cash. The future cash, I would say that, as I already said, whatever cash surplus we are generating, see, we invested close to INR 2,000 crore only last year on the new packaging board, this, and also the acquisition of corrugation business. We have utilized so much of the funds from the company. We want to again build the treasury, build the war chest and, in fact, I had given the target that we should have close to INR 1,500 crore of the war chest before we do anything. That's the plan. Okay, sir. Thank you so much for the answers. That's all from my side. Thank you, Mr. Verma. Next we have Sandesh. Sandesh, please go ahead. Hello, sir. Hello everyone. Congratulations on good set of numbers, first of all, for the full year actually. You know, this is the fruits of seeds which was sown actually 5 years back. Now going ahead, just want to understand, sir, what would be our roadmap for next 5 years. Is that what kind of capacity are we trying to achieve by FY 2024? Is it going to be a bit like broad-based capacity expansion across our existing portfolio? Are we, or are we keen to grow paperboard segment, as it is a more structural growth story? Is it like any other more product category we like to penetrate, like kraft paper or back integrate our corrugated packaging operations? Are we looking for any kind of inorganic opportunities at the moment as well? Okay. No, good. Thank you very much for complimenting the team for the result. In fact, I would say that one more contributing factor was a very favorable market, and you don't get favorable market all the time. That's one part. We do our role, we play our role in much, much better manner, and that we will continue to do. As far as the roadmap, your question is concerned, I would say that 2023, 2024, our effort would be to utilize our packaging board new capacity and also the Sirpur to the 100% so that we get the incremental the top means the volume, top line, and also the advantage of profitability from a higher capacity utilization. That's one part. Corrugation business, we are still learning. Certainly we would do better on the higher volume utilization and new customer acquisition, so that also add value for JK Paper. Thereafter, I mean, it's very difficult at this stage because we are evaluating all the options for a capital allocation. As I said that once we build our war chest, thereafter the capital allocation, it will depend whether the kraft paper gives me advantage or whether the new acquisition gives me advantage. I mean, that will all depend on the year 2023, 2024, how it pans down and how the market behave. We take a call. If I just have to look at the history of JK Paper, sir. You know, at a lower capacity, like, we have been able to do large CapEx. At the current capacity, we have the ability to do even larger CapEx. You know, sir, even if you try to build a war chest, you can still very much afford to, you know, go for a CapEx even now. What are your thoughts on that, sir? No, you are absolutely right. I can only tell you that 15 years back we took a risk and a chance. You're right that that time our balance sheet size was small and we took a major CapEx. All the time you don't take such kind of a risk. You would recall that on a smaller balance sheet we took a call and expanded and spent INR 2,000 crore. Just after that, for two years we were in the red. We incurred loss, heavy losses in the year 2013-2014 and 2014-2015. That we don't want to repeat, and we don't want to disappoint our investor and all the stakeholders. Whatever call we take, it has to be a very judicious call, very balanced call, and so that, we do which is sustainable with the strong fundamentals and, the financial fundamentals. Okay. Very much appreciate that, sir. Question more on technical side, sir. If we have to have a rough conversion of, you know, cost of pulp into paper in US, USD per ton basis, sir, assuming our hard BHKP prices settles around $500 per ton. What should we import parity prices of paper and writing in India if we were to assume the Forex rate at INR 83 per USD? If you also, you include current logistic and existing duty structure, sir. As I said that if the pulp prices remain at $500, then the prices at that level should be somewhere around $800-$850. Plus some kind of a $50 clearing, forwarding, other logistics or whatever it is. $900 price. You calculate INR 82, $900, INR 82, something around what? INR 74. INR 74-INR 75 is a decent price if the pulp prices are $500. Please understand, on a long-term basis, pulp price of $500 is not a sustainable remunerative price for the pulp manufacturers. It will be close to $550-$600. If $600 is the price, the pulp price $600, the paper and board prices would be close to $950 to $900, $950, which means INR 80. Okay, great, sir. On a broader sense, sir, we expecting... What will be the stages of New Education Policy, sir? You know, when do we expect it to get implemented? Also for industry, sir, you know, can you quantify what to, what kind of incremental demand it is expected to bring? How long do we expect the, you know, NEP's growth to be, you know, be there in the market? See the new education policy as far as the part is concerned, part is being implemented from the year 2023, 2024. The publication, some publication and the printing has already started. I mean, in fact, it started sometime in November, December 2022, and this should be over. I mean, it is already over now because the new session has already been started now, the school then those will open from July, some part of the country, and some part maybe from 15th of June. Part has already started, but the full implementation are understanding that it will happen the next education session. That means the year 2023, 2024 again will have a good demand of the writing printing paper. It's very difficult to quantify because very difficult. I would only say that, to what extent it is for the school, to what extent it is for colleges, to what extent it is for the professional book printing or commercial book printing. I would say that there will be a sizable demand because of the New Education Policy. Yes. Okay. Just one request from our side, sir. If you can at least publish an investor presentation every quarter, you know, so we can have access to quarterly operational data, that will be absolutely great, sir. All right. Thank you. Thank you so much, sir. Thank you. Thank you, Sandesh. Next we have Mr. S. B. Bhaiya. Sir, please go ahead. Mr. Bhaiya? Sir, there is no response. We'll move ahead. Yeah, yeah. Okay, sure. Are you hearing me now? Yeah, please go ahead. Sir, I've been associated with your company for last more than 15 years, and I've seen your journey from, say before 2010. All your expansions actually right from your paper expansion and paper board expansion, you've done wonderfully well. All your expansions have gone very, very well. Thank you so much. Yeah. Yes, please. Yeah. I said thank you so much. Right. You have been doing very market-leading performance and everywhere actually there's absolutely nothing to talk about. Of late actually I'm seeing a distinct shift in your strategy. From being a paper player, you have suddenly started investing in a major way, paper board before that. You invested in a Bangalore plant. I think it was something IT related. What is the actually way going forward? Are your strategies shifting from paper to paper-related items or related? Are you shifting the company from paper company to paper-related companies? I just wanted to hear your opinion about that. Thank you so much. In fact, our core strength is manufacturing, also our core strength is volume manufacturing. Also over a period of time, we developed our core strength as a marketing also a core strength. These core strength, I mean, I would say that complement and supplement for a volume production as well as the two marketing. I would say that we will continue to be a very strong player in the paper industry. There's no doubt about it. Whether it is packaging paper or it is a writing printing paper, so we are going to remain as a very strong paper player. What we thought. Sir, do I take it that you did not find sufficient opportunity in the paper sector actually before looking for these corrugated boxes? I'm told that other than what you are doing, that is you are already in writing and printing, you are already in paper board, which are major segments, but there are other segments also which are doing very well and you are not present in those. What made you actually diversify from paper to corrugated boxes. Actually, there are reasonable opportunities I thought in paper sector itself, like tissue paper is very, very fast growing, in which you are absolutely not present. I'm told Century and even Orient Paper is doing very, very well there. Anyhow, this is actually your diversification right now is totally unrelated. You do not have any experience in there. Being an investor, actually, we have got question marks that how well you will doing in that. If you actually expand in your paper business, at least we have got reasonable degree of surety that you'll be doing very well in whatever you're doing in the paper sector. Anyhow, what made you go out of the paper and sub- invest this heavily in corrugated boxes? Which I'm told that, right, these are all concentrated by small scale people and low margin items, and you have to near to the customer also because of the transportation cost, so you can cannot expand operations in one particular place. Is there? Actually, as an investor, we are seeing a distinct shift in this strategy. I don't know what has made you to think so. No, I mean, your question is very, very right. At the same time, our thought and our response is also very, very precise and specific. I can tell you that, yes, as I said that we will remain a very strong paper player. There's no doubt about it. See, the paper writing and printing paper, we are fairly strong and we have been strong. After Sirpur acquisition, because that added close to 1 lakh 30,000 ton of writing printing paper. That's one addition in the paper. We added 1 lakh 70,000 ton of a white packaging, virgin packaging board machine only last year. Again expanded in paper. Please understand. Now the white paper we are close to 8 lakh ton capacity, which is India's, I mean, almost largest paper and packaging board capacity we have today. We are going to do the debottlenecking and all the other stuff what we can do. At the same time, please understand globally also, all the paper player. I mean, I'm telling you that the corrugation business is a very, very growth-oriented business in time to come. Those who enter first, they will have the prime mover advantage of consolidation opportunities. See, in India, it is fragmented. Let me tell you that in U.S., the top 5 player of corrugation industry, they command 80% market share. In India, there will be thousands of players. The size of the player, I mean, just 2 acquisition, we became India's number 1 corrugator. Still, number one corrugator has just 4% market share in the corrugation industry. This is so much fragmented, but it will provide the huge opportunity in time to come for a consolidation quality product. I mean, in fact, in India, there are 10,000 corrugators in the country, but automatic machines are there only with 200 people. Imagine. In time to come, when you have a quality requirement, there will be a huge opportunity for the corrugation player in time to come. This is one part. Also we thought that there is a huge synergy for JK Paper in corrugation business because the white virgin board, what we produce, goes to all the FMCG player, all the food player, all the pharmaceutical player. The same player are also buying the brown boxes. I have a set of customer who are getting my carton board or my white board as a packaging material, they are going for a brown material to somebody else. I mean, we thought that why don't we become a total packaging materials as a supplier to those customer? We know those customers. We have the connect with the customer. This is one reason. The tissue, you asked this question. In fact, we debated for many years, in fact, I have been debating this for 10 year internally, we don't find this is a remunerative product line in the paper industry. Century Orient, they are producing, I don't think they're making decent money in those, in that product line. I mean, reasonable money they must be making, it's not very rewarding paper category. Hope I have answered all of your questions. No, I see the- Mr. Bhaiya, can you please. ...going forward. Mr. Bhaya, can you please come in the queue? There are a couple of participants. Thank you. Thank you very much. Yeah. Sure. Next we have Mr. Niraj Mansingka. Sir, please go ahead. Yes, sir. Thank you for the opportunity. wanted to, a few things. What has been the inflation in the wood prices in last 1 or 2 years, in a percentage terms? just wanted to know that. Something around 7%-12%, depending on the which market you are buying. Okay. Which, which is in way, in fact like an inflation, only, right? It's not a. Probably more than the inflation. The inflation I would consider something around 5 and odd%. The wood price and depending on the different location from where are you buying, it was 7%-12%. Do you see further inflation to continue, or see the pressure has moderated? No, no. I am saying that there will be a further pressure. Okay. Got it. In terms of the NSR, I know you won't share the prices, but can you give a broad range of how much the NSR has changed in% in last one quarter? I just want a range also, that's okay. Range? Industry market prices would also be okay, rather than only your prices. On an average. As I said that the coated paper prices, came down by close to 15% or 20%. Yeah, 20. Packaging board also dropped by something around 10%-12%. Yeah. The writing printing? Writing printing, they were not wrong. They were not wrong. Okay, do you see this because of the demand in the printers of, because of the NEP? Or this is, what might be the reason of less demands fall in the? It was NEP. Predominantly NEP and also now, there is again a trend of the physical copies rather than just online reading. The people are interested again reading a physical book. The people are now, the school, colleges and coaching center, they are again back to the physical rather than just a virtual. That helps. Got it, sir. The other question is on the international prices versus Indian prices. What we have observed is that India's paper prices, the premium versus the international prices has increased in the last two quarters. Can you comment on that? What is the reason? Do you see this moderation coming on or you see that to stay for some time? No, no. Which paper are you comparing international and domestic? Uncoated paper. Uncoated? Yeah. Writing printing, yeah. Uncoated paper prices globally also they were very high. In fact at, six months back even, or maybe eight, nine months back, the global prices were much higher than the domestic prices even. In fact, our export realization was higher than the domestic realization. Okay, okay. It was- Can you give a color on the premium or discount of India versus international? That would be useful. Right now the international prices are lower. It may be lower by 7%-10%. At one point of time it was higher by 8%, 9%. Right now it is lower. It will get corrected in due course of time. Last five, six years, what would be that average? India was at premium or at a discount? I would say that the global prices were lower by 3%-5%, long-term average. Okay. The global was lower or global prices, right? Yes. India always commanded a premium to international prices generally. Yes, yes. As I said that all the time it will depend on demand and supply trend of that particular period. Okay, got it. That's it. Immediately if immediately if a new capacity comes in the market, there will be a drop in prices. Sir, two small questions again. On instead of giving a dividend, why don't you do a buyback, or so that it will not only improve the valuations plus also be efficient on the taxation side? There are pros and cons of both. There are set of investors who would say that we are happy with the dividend. There are investors who would say that we are happy with the buyback. Investors would be happy, would be non, only mostly a mutual fund which would be having taxation benefit, but all individual investors would be wanting, a buyback, right? I don't know. Promoter also have an incentive to pay less taxation. That all depends. That all depends that which investor want to tender or want to do it. If they want to continue to hold, some investors still want to continue the dividend. It depends that how the investor is keeping the stock in their portfolio. Investor to investor it differs. As a rewarding as a policy that board has decided. Sorry, that's a suggestion because it takes care of two things rather than one thing. Yeah. All right. The suggestion is noted. Yeah. Last thing is on the corrugated plant. Can you tell what is the capacity and I think you had to also, there was a acquisition cost of INR 578. What I read in the... How much do you need to pay more and how much is the potential to add capacity? Can you just share something on this? I think the capacity of the plant we acquired is what, 260,000? 2.60 lakh. Yeah. 260,000 tons. In this industry, utilization, the best utilization is considered 70% plus. Because in the peak time you utilize 100% and the off time you are at 40%, 50%. Average utilization, 70% plus is considered very good utilization. Have you paid entire sum or there's something to be paid left? As I said, we have declared that we have paid 85%. You have bought 85%, 15% is still left. Isn't it? How much is the potential to add capacity in those two locations? See, as I said that these two locations, in one location we are adding capacity. By end of this year itself, there will be some addition. The other location we don't have to add. In fact, we need to acquire customer and utilize the capacity better. Okay. Again related. The location that you're adding capacity will take your 260,000 tons to total to how much? I think it is something around 20,000. Around 20,000 additional. 280. 280 KTPA. When you're saying you need to acquire customer second location, so then the utilization on the current state would be lower. Yes, currently it is lower. If we acquire customer, we can utilize it better. How much is your average utilization for this, the both of them combined? Right now it is about 60%. 60%. Right now it is 60%, so we want to take it to 70%+. Got it. But that's, that is hardly any left. Do you also plan further expansion or do you see? Because this is a very large investment. It is a huge, huge capacity is left out because 10% or 15% additional utilization means it is something around 30,000-45,000 ton-. 40,000. ...which is sizable. Okay. What is the average utilization in industry for this corrugated paper? I think it would be close to 60%-65% average. 60%, 65%. The best player would be doing 70%-75%. No, no, I'm talking about average NSR for this on industry average. Oh, NSR you asked. Yeah. I have no idea. I have no idea. But here- As I said that we are still learning this trade. NSR is not a relevant thing because the kraft paper price is all, it's passed on. Based on the kraft paper price fluctuation, NSR also will fluctuate. That may not be a right parameter to look at. Got it. Thank you from our side. Thank you. Yeah. Should we take, last participant, Rajesh? He's in the queue from a long time. Okay, 5 minutes. Yeah. Rajesh, please go ahead. Yeah. Hello, sir. How are you? Good, thank you. I had just a couple of questions. When you look at the Q4 volumes, it's just 191 KT. Is it reasonable to assume that because of the prices, price reduction, we are not producing up to full capacity now in at least coated paper and even the uncoated paper volumes are lower YOY basis? YOY, in fact, the volumes are slightly lower. Second, related question is that for the coming year, will we then see a lower utilization as it like we were talking about 800 KT in all? I'm talking about standalone business. Will we again see 750KT-770 KT given the price correction? What is that? Which- There is no volume drop as far as we are concerned. You are seeing a presentation. In the year, coming year also the volume is going to be higher. It can't be lower. Rajesh you are seeing a presentation uploaded, no? That. Thank you. Q4 compared to Q4 is just 191. It's the same. Yeah, the 191 it is same. The breakdown that we have given, there is a slight drop compared to last previous quarter in uncoated. If you see that overall, 12 months figure, now on the uncoated segment, it is again, 389, it's 436. It's a 12% growth. Should we take this year's volume is also similar, 770 or something like that? It should be better than this. Okay. Even after the price correction, you are saying the volume will be better. Yes. Yeah. Secondly, sir, my question is, do we have an option of using more imported pulp now that the pulp prices are lower instead of buying more wood in the market? In which case, can we get our RM costs more? Always we keep some kind of a ready reckoner on the table that at what price it makes sense for me to use imported pulp and at what price it makes sense for me to produce the local pulp. It still makes a case for producing the pulp out of wood here. Okay. That's fair. My last question is that we've seen the impact of pulp prices has not yet been felt in writing and printing, will we see that impact in the coming quarter or the next two quarters? You indicated sustainable price of INR 80, if you look at it, I'm not asking you the exact realization, it will still be somewhere around INR 84, INR 85 right now. There is still scope for a downside to about INR 75 after which it will come back up again. Is that the way the trend is likely to play out? What do you think? Your opinion on that. As I said that, the pulp prices globally on a long run, it should be close to $600. Mm-hmm. Long run. If it is $600, the global and the prices in the band of $900-$950. When it is $950, that means the NSR should be close to $950. It should be close to INR 80. INR 80, yeah. It's still higher than INR 80 as of... I mean, my assumption is that, yeah. It is higher than INR 80. It may be INR 2, INR 3 plus or minus depending on the category and the depending on other thing. Right. This should be. There would be a play of demand, supply. If there is a good demand, the prices will remain at a higher level. If the demand is lower, let's say after the year 2023, 2024, when the new education policy implementation has already happened and there is a plateau of demand, the price may come down also. Oh, okay. Right. Yeah. If I am permitted to ask one last question, what is the sustainable margin that you can see in this industry? Because we've seen, like in rupees per kg, margins go from INR 10 to INR 30 at a very large range over the last few years. What is the sustainable rupees per kg margin at an EBITDA level that you can build in on a longer term? As I said that we don't calculate in rupee per kg, we calculate as a% of net sales. Yeah. I would say that anywhere between 20% to 25% is sustainable, decent margin for the industry where your ROC would be healthy. 20%, you can say it will not break down below 20% significantly, if at all. It should not. There has been a time where it was lower than 20 once. Yes, exactly. Yeah. Yeah, yeah. Okay. Sir, we have also seen in the IPMA data, I mean, post-COVID, that a lot of small- scale guys had actually gone out of business. The export-import ratio of India was for two years, 2021--2021, 2022, had turned against, you know, in favor of exports. If you look at 2022, 2023, imports have surged again. Is that a cause for worry? The imports surged because there was a higher demand in the domestic market. I mean, the export came down and the import was higher. As far as the coated paper is concerned, the import grew and also the other paper category, but it is not very sizable. I would say that still India will remain as a, I would say that net exporting country in time to come. Thank you, sir. It will all depend on the kraft paper export to China. If the export to China of a kraft paper comes down, there will be again a distortion. Right. Thank you so much. Thank you so much. Thank you. Thank you. Archana Ji. Should we conclude the call? Yes. Any final comments, Sir? Mehta, Sir, any final words? No, thank you very much. As I said that, the year has been a good year, but the year 2023-2024 is likely to be volatile and we need to be prepared for that volatility. At the same time, because JK Paper has its own strength, so we should do better. Thank you so much, sir, and all the best. Thank you. Thank you. Thank you all. Thank you.