ORIENTPPR - Orient Paper

📊 NSE: ORIENTPPR 🏢 Paper 📅 Last Updated: 12/14/2025 10:46

💰 Financial Performance

Revenue Growth by Segment

Total revenue grew 7.67% YoY to Rs. 895.79 Cr in FY25. The Paper & Tissue segment contributed Rs. 751.30 Cr (83.9% of total), while the Chemicals segment contributed Rs. 161.87 Cr (18.1%). For H1 FY26, Paper & Tissue revenue was Rs. 355.03 Cr (down 6.7% YoY) and Chemicals was Rs. 89.24 Cr (up 18.7% YoY).

Profitability Margins

Operating Profit Margin declined significantly from 10.37% in FY24 to -0.57% in FY25. Net profit turned from a profit of Rs. 6.23 Cr in FY24 to a loss of Rs. 54.66 Cr in FY25. Return on Net Worth dropped from 0.40% to -3.47% YoY.

EBITDA Margin

Operating Profit Margin was -0.57% in FY25, representing a drop of 1,094 basis points from the previous year's 10.37% due to higher raw material costs and sub-optimal capacity utilization.

Capital Expenditure

The company invested Rs. 66.99 Cr on capital projects during FY25, focusing on modernization and debottlenecking of facilities.

Credit Rating & Borrowing

CARE A; Stable (downgraded from CARE A+; Negative in March 2025). Finance costs for H1 FY26 stood at Rs. 13.77 Cr on a total debt of approximately Rs. 252.98 Cr.

⚙️ Operational Drivers

Raw Materials

Bamboo, wood, and international pulp. High costs of bamboo and wood led to operating losses in 9MFY25.

Import Sources

International markets for pulp; domestic sources for bamboo and wood.

Capacity Expansion

Current focus is on debottlenecking and modernization rather than greenfield expansion; sub-optimal capacity utilization of the tissue paper plant remains a constraint.

Raw Material Costs

Raw material costs represent a significant portion of revenue; volatility in international pulp prices and high domestic bamboo/wood costs led to a negative operating margin of -0.57% in FY25.

Manufacturing Efficiency

Capacity utilization of the tissue plant is sub-optimal; modernization partnering with OEMs is underway to improve plant reliability.

Logistics & Distribution

AI-led technological enhancements are being implemented to optimize transportation planning and reduce distribution inefficiencies.

📈 Strategic Growth

Expected Growth Rate

10%

Growth Strategy

Growth will be achieved through modernization of facilities with OEM partners, debottlenecking capacities to improve margins, and AI-led technological enhancements to reduce production wastage and optimize logistics.

Products & Services

Writing and printing paper, tissue paper, and caustic soda (chemicals).

Brand Portfolio

Orient Paper.

Market Share & Ranking

Established market position in the tissue paper industry.

Strategic Alliances

Partnering with Original Equipment Manufacturers (OEMs) for facility modernization.

🌍 External Factors

Industry Trends

The industry is characterized by cyclicality and price volatility; there is an increasing focus on tissue paper where the company has an established position.

Competitive Landscape

The company operates in a competitive and cyclical market with pressure on realizations.

Competitive Moat

Moat is derived from being part of the established C. K. Birla group, providing financial flexibility and a long track record in the paper industry.

Macro Economic Sensitivity

Highly sensitive to cyclicality in the paper industry and volatility in global pulp prices.

Geopolitical Risks

Exposure to international pulp price volatility influenced by global trade dynamics.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to pollution norms and environmental regulations typical of the paper and chemical industries.

Taxation Policy Impact

The company has exercised the option under Section 115BAA of the Income-tax Act, 1961.

Legal Contingencies

Significant contingent liabilities relating to water tax and cess on captive power consumption are currently under dispute.

⚠️ Risk Analysis

Key Uncertainties

Raw material price volatility (bamboo, wood, pulp) and cyclicality of the paper industry are primary risks that impacted FY25 margins by over 1,000 bps.