Shares of JK Paper rose 4% to Rs 435.90 in intraday trade on the BSE on Tuesday after JK Paper acquired majority stakes in Horizon Packs and Securipax Packaging.

JK Paper has agreed to acquire an 85% stake in Horizon Packs (HPPL) and Securipax Packaging (SPPL). The remaining 15% stake will be purchased over three years, the paper and packaging board company said in a release.

HPPL and SPPL are the largest corrugated packaging manufacturers in India, with seven plants across the country. In FY2021-22, HPPL and SPPL had a combined revenue of Rs 832 crore. The company said that corrugated packaging is a fast-growing segment of the paper and packaging industry in India, driven by growth in end-use industries such as food and beverage and fast-moving consumer goods.

Changing consumer preferences are driving the demand for premium eco-friendly packaging. This acquisition allows us to benefit from the existing strengths of HPPL and SPPL. According to JK Paper’s management, customers, employees, suppliers and partners of HPPL and SPPL will benefit from JK Paper’s extensive manufacturing knowledge and experience, high standards of operational excellence, financial management and corporate governance.

Shares of JK Paper have risen 13% in the past month, outperforming the broader market, while the S&P BSE Sensex has gained 3%. It has soared 105% over the past year on solid gains. That compares with a 12% rise in the benchmark index over the same period. The stock hit an all-time high of Rs 450 on August 17, 2022.

For the half year ended September 30, 2022, JK Paper’s consolidated turnover was Rs 3,231 crore (up 88%), EBITDA at Rs 1,045 crore (up 118%), profit after tax (PAT) at Rs 586 crore (up 164%), the first six months of this year surpassed the PAT for the whole of last year.

The company said it could post sequential and year-on-year growth despite headwinds from higher input costs. Volume growth was driven by increased capacity for new packaging boards and improved overall realisation. It added that finance costs are also lower due to efficient working capital management and negotiated lower interest rates.