💰 Financial Performance

Revenue Growth by Segment

Total revenue for FY24 was INR 170.70 Cr, a slight decline from INR 172.01 Cr in FY23. Segment performance for FY24: Printing Division revenue was INR 52.68 Cr (down 27.4% from INR 72.57 Cr), Flexible Packaging revenue was INR 70.97 Cr (down 7.2% from INR 76.49 Cr), and Paper Board Packaging revenue was INR 17.60 Cr (down 17.9% from INR 21.45 Cr). A new Candles Division contributed INR 1.29 Cr. In 9MFY25, revenue declined further by 12% YoY to approximately INR 107 Cr.

Profitability Margins

Operating Profit Margin declined from 3.71% in FY24 to 2.31% in FY25, a 37.74% reduction. Net Profit Margin worsened from -0.62% in FY24 to -1.95% in FY25, representing a 214.52% increase in loss intensity. Return on Net Worth dropped from -1.56% to -4.24% during the same period.

EBITDA Margin

PBILDT margin was approximately 3% in FY23 and maintained through 9MFY24. However, the operating profit margin for FY25 stands at 2.31%, reflecting a 37.74% YoY decline due to lower sales realizations and softening raw material prices impacting top-line value.

Credit Rating & Borrowing

Long-term bank facilities of INR 27.77 Cr and fixed deposits of INR 8.00 Cr are rated CARE BB+; Stable. Short-term bank facilities of INR 19.50 Cr are rated CARE A4+. Ratings were reaffirmed based on promoter experience but constrained by persistent cash losses and high debt-to-GCA ratios.

⚙️ Operational Drivers

Raw Materials

Recycled Kraft paper (industry consumes 7.5 million MT/year), plastic/polymers for flexible packaging, and paper board. Raw material costs are a major driver, with softening prices recently leading to a 12% decline in sales realizations.

Capacity Expansion

Current installed capacity is not explicitly stated in MT; however, the company operates across three main segments: Printing, Flexible Packaging, and Paper Board Packaging. No specific expansion timeline is provided.

Raw Material Costs

Raw material price volatility significantly impacts margins; a decline in realizations in 9MFY25 led to a 12% revenue drop. The company struggles with timely price revisions due to its moderate scale in a competitive market.

Manufacturing Efficiency

Capacity utilization is not specified, but high working capital utilization (average 88% over 12 months) indicates a stretched operating cycle due to inventory build-up at manufacturing locations.

📈 Strategic Growth

Expected Growth Rate

11.30%

Growth Strategy

The company aims to achieve growth by leveraging its established position in the printing and packaging segments and the post-COVID revival of the printing business. Positive rating triggers include scaling operations above INR 190 Cr and sustaining PBILDT margins above 4-6% through improved efficiency and product mix.

Products & Services

Commercial printing materials, flexible packaging pouches and films, paper board cartons, and candles.

Brand Portfolio

Orient Press Limited.

New Products/Services

The company recently launched a Candles Division which contributed INR 1.29 Cr in its first year.

Market Share & Ranking

The company operates in an intensely competitive and largely unorganized market, which restricts its pricing power.

🌍 External Factors

Industry Trends

The printing and packaging industry is a major employer but remains largely unorganized. There is a shift toward eco-friendly materials, with the industry consuming 7.5 million MT of recycled Kraft paper annually. Future growth depends on the revival of commercial printing and the expansion of the flexible packaging market.

Competitive Landscape

Intensely competitive market with many unorganized players, which puts pressure on margins and limits the scale of operations for organized entities like OPL.

Competitive Moat

The company's moat is based on the long-standing experience of the Maheshwari family (promoters) and established client relationships. However, this moat is weak against intense competition from unorganized players and volatile input costs.

Macro Economic Sensitivity

Highly sensitive to raw material price cycles and the general economic environment affecting the media and publication sector.

Consumer Behavior

Revival in demand for printing services post-COVID has been noted as a positive driver for the printing segment.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to environmental norms regarding plastic usage and waste management in the packaging sector. CSR requirements were not applicable for the 2021-2024 period due to persistent losses.

Environmental Compliance

The company faces sensitivity to government regulations regarding the flexible packaging (plastic) industry, which could impact its largest revenue segment.

Legal Contingencies

The company maintains provisions for doubtful trade receivables and expected credit losses, as well as provisions for gratuity and compensated absences. Specific values for pending court cases are not disclosed.

⚠️ Risk Analysis

Key Uncertainties

Key risks include persistent PAT losses (INR 2.20 Cr in 9MFY25), a stretched operating cycle (target is below 90 days but currently much higher), and high total debt to gross cash accrual (24.88x in FY24).

Third Party Dependencies

High dependency on raw material suppliers for Kraft paper and polymers; volatility in these prices directly impacts the company's ability to maintain margins.

Technology Obsolescence Risk

The printing industry faces digital disruption, though the company's focus on packaging provides a hedge as physical goods require physical packaging.

Credit & Counterparty Risk

Receivables quality is a concern, as evidenced by an 8.69% decline in the Debtors Turnover Ratio and the need for provisions for doubtful trade receivables.