💰 Financial Performance

Revenue Growth by Segment

The Paper Business revenue grew 18.45% YoY to INR 493.26 Cr in H1 FY26 from INR 416.42 Cr in H1 FY25. The Coke Business revenue declined 1.45% YoY to INR 6.81 Cr from INR 6.91 Cr. Total standalone revenue for FY25 reached INR 849.15 Cr, a 30.4% increase from INR 651.03 Cr in FY24.

Geographic Revenue Split

Not disclosed in available documents; however, the registered office and primary operations are located in Moradabad, Uttar Pradesh.

Profitability Margins

Operating margins improved to 8.5% in FY24 from 4.47% in FY23 due to softening input prices. FY25 Net Profit Margin stood at 0.95% with a Profit After Tax of INR 8.08 Cr on revenue of INR 849.15 Cr. Operating margins are expected to sustain at or above 9% in the medium term.

EBITDA Margin

EBITDA margins are expected to remain healthy at more than 8-9% over the medium term, supported by volumetric expansion and the commencement of new product lines like food grade paper.

Capital Expenditure

The company invested INR 64.91 Cr in property, plant, and equipment (PPE) and capital work-in-progress during FY25. For H1 FY26, the capital expenditure on PPE was INR 39.24 Cr.

Credit Rating & Borrowing

CRISIL Ratings maintains a stable/positive outlook. The company faces high repayment obligations, with finance costs (net) amounting to INR 35.46 Cr in FY25, representing 4.17% of total revenue. Debt-to-equity ratio increased to 0.77 in FY25 from 0.68 in FY24.

⚙️ Operational Drivers

Raw Materials

Raw materials (primarily waste paper and chemicals for kraft/duplex production) accounted for INR 626.08 Cr in FY25, representing 73.7% of total revenue.

Capacity Expansion

Current capacity utilization is moderately low at 45-50%. The company recently installed a new turbine (Dec 2023-Jan 2024) and is expanding into food grade paper and writing/printing paper lines to drive volumetric growth.

Raw Material Costs

Raw material costs increased 44.4% YoY to INR 626.08 Cr in FY25 from INR 433.41 Cr in FY24, tracking the 30.4% revenue growth and expanded production volumes.

Manufacturing Efficiency

Capacity utilization remains a challenge at 45-50%. Efficiency is being targeted through technology upgrades like the turbine installation and shifting toward higher-value product grades.

📈 Strategic Growth

Expected Growth Rate

15-20%

Growth Strategy

Growth will be driven by volumetric expansion in existing lines and the launch of new product categories, specifically writing and printing paper and food grade paper. The company is also leveraging its 'Strategic Investment Division' to manage focused investment activities.

Products & Services

Industrial kraft paper, duplex board, writing and printing paper, food grade paper, and metallurgical coke.

Brand Portfolio

Genus Paper & Boards.

New Products/Services

Food grade paper and writing/printing paper are the primary new launches, expected to contribute significantly to the 15-20% projected revenue growth in FY26.

Market Expansion

The company is positioning itself for broader market traction in packaging and duplex board segments to achieve sustainable growth.

Strategic Alliances

The company relies on need-based support from group companies in the form of unsecured loans (USLs) to meet debt repayment obligations when net cash accruals are insufficient.

🌍 External Factors

Industry Trends

The industrial paper industry is seeing a shift toward specialized packaging (food grade). While the sector is growing, it remains fragmented with small players causing price volatility during economic shifts.

Competitive Landscape

Intense competition from both large established players and small unorganized mills that fluctuate capacity based on market pricing.

Competitive Moat

Moat is derived from an established market position and the extensive experience of the promoters. However, the moat is weakened by the commodity nature of kraft paper and low capacity utilization.

Macro Economic Sensitivity

Highly sensitive to industrial growth and consumer spending, as these drive demand for packaging paper. The industry is inherently cyclical.

Consumer Behavior

Increasing demand for sustainable packaging and food-grade materials is shifting the company's focus toward these specific segments.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to environmental regulations regarding water discharge and air emissions, as well as manufacturing standards for food-grade packaging.

Environmental Compliance

The company must adhere to stringent pollution control norms typical for the paper industry, though specific ESG spend is not disclosed.

Taxation Policy Impact

The company recorded a deferred tax expense of INR 11.38 Lakhs in FY25. No current tax was paid for the year.

Legal Contingencies

Not disclosed in available documents; however, auditors issued an unqualified report on internal financial controls.

⚠️ Risk Analysis

Key Uncertainties

The primary risk is the insufficiency of net cash accruals (NCA) to meet debt repayment obligations, which necessitated promoter infusion of unsecured loans in FY24 and FY25.

Geographic Concentration Risk

High concentration of manufacturing assets in Moradabad, Uttar Pradesh.

Third Party Dependencies

High dependency on group companies for financial liquidity and debt servicing support.

Technology Obsolescence Risk

The company is mitigating obsolescence by upgrading equipment, such as the turbine installation, to maintain cost competitiveness against newer mills.

Credit & Counterparty Risk

Debtors turnover ratio is stable at 10.51, indicating reasonable receivables management, though trade receivables increased by INR 54.49 Cr in FY25.