KUANTUM - Kuantum Papers

📊 NSE: KUANTUM 🏢 Paper 📅 Last Updated: 12/14/2025 9:07

💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment: Paper manufacturing. FY25 revenue was INR 1,113.12 Cr, representing an 8.5% decline from FY24's INR 1,216.94 Cr. H1-FY26 revenue was INR 502.6 Cr, a decline of 10.2% YoY from INR 559.6 Cr.

Profitability Margins

FY25 Net Profit margin was 10.4% (INR 115.18 Cr), down from 15.1% in FY24. H1-FY26 PAT margin dropped significantly to 3.54% (INR 17.8 Cr) from 12.17% in H1-FY25 due to elevated input costs and subdued realizations.

EBITDA Margin

FY25 EBITDA margin was 22.4% (INR 248.68 Cr), down from 27.5% in FY24. H1-FY26 EBITDA margin further declined to 14.88% (INR 74.8 Cr), down 876 bps YoY due to wood cost inflation and import pressure.

Capital Expenditure

The company successfully completed the upgradation of PM4 in Q2 FY26. Future planned investments are focused on capacity expansion in high-margin tissue and specialty paper segments, though specific INR Cr values for future plans are not disclosed.

Credit Rating & Borrowing

CARE Ratings believes the company will sustain a comfortable financial risk profile. Finance costs for H1-FY26 were INR 22.3 Cr, an increase of 21.2% YoY from INR 18.4 Cr.

⚙️ Operational Drivers

Raw Materials

Agro-residues (wheat straw, sarkanda, bagasse) and wood (chips, veneer waste, bamboo). Wood costs represent a major portion of the cost structure and escalated significantly in FY25 due to limited domestic availability.

Import Sources

Primarily sources agro-residues and wood domestically; however, the company is exposed to global pulp price volatility for non-integrated operations.

Capacity Expansion

Current capacity is 450 TPD. The PM4 upgrade in Q2 FY26 increased production by 3,500 tons compared to Q2 FY25. Planned expansion focuses on tissue and specialty paper segments.

Raw Material Costs

Raw material costs for domestic wood escalated significantly in FY25. While Net Sales Realization (NSR) declined by 13-14%, the company contained the impact on profitability, with EBITDA margin reducing by only 5.5% to 22.4% in FY25 through cost optimization.

Manufacturing Efficiency

Achieved highest-ever production of 160,861 MT in FY25 (up 5.1% from 153,058 MT), reflecting efficient utilization of all paper machines and backward integration.

📈 Strategic Growth

Growth Strategy

The company plans to achieve growth by shifting its product mix toward high-margin tissue and specialty papers, upgrading machinery (PM4) to increase production capacity, and implementing Industry 4.0 technologies to optimize manufacturing costs and operational efficiency.

Products & Services

Writing & Printing paper, Copier paper, and Specialty papers (cup stock, carry bags).

Brand Portfolio

Kuantum.

New Products/Services

Tissue and specialty papers (cup stock, carry bags) are the primary focus for new high-margin revenue streams.

Market Expansion

Focusing on high-margin segments like tissue and specialty paper; specific geographic expansion plans not disclosed.

Market Share & Ranking

Positioned among the highest-performing paper manufacturers in India with benchmark-setting EBITDA margins.

🌍 External Factors

Industry Trends

Industry is facing cyclical pressure from low-priced imports and high raw material costs, while shifting toward sustainable packaging solutions.

Competitive Landscape

Intense competition from low-priced imports and domestic wood-based industries.

Competitive Moat

Cost leadership (22.4% EBITDA margin in FY25) and backward integration (in-house pulp) provide a durable advantage. This is sustainable because the company's strategic location allows it to utilize agro-residues effectively, reducing reliance on expensive wood.