Mixed Q3 results underline margin stress across India’s paper sector

Among large integrated producers, JK Paper maintained scale leadership but reported one of the sharpest profit contractions. The company recorded quarterly sales of INR 1,763 crore, while profit after tax (PAT) stood at INR 35.88 crore, marking a 56% year-on-year decline. Revenue growth remained largely flat at 1.9%. The company attributed the decline to annual maintenance shutdowns at key plants, higher finance costs due to rupee depreciation and pricing pressure from cheaper imports. The consolidation of Borkar Packaging also affected year-on-year comparability.

West Coast Paper Mills reported similar earnings stress. The company posted quarterly sales of INR 1,043-crore with PAT at INR 17.49-crore. Sales declined marginally by 1.59%, while profits dropped 60.74%, reflecting sustained margin pressure arising from rising input costs and demand fluctuations.

Tamil Nadu Newsprint & Papers (TNPL) emerged as a relative outlier, delivering profit growth despite industry headwinds. The company reported quarterly sales of INR 1,121-crore, with PAT of INR 6.77-crore, representing a 102.6% increase in profit and 7.45% growth in sales. The improvement suggests gains from operational efficiencies and product mix optimisation, although stock performance remained subdued, mirroring broader sector sentiment.

Mid-sized producers also reported earnings volatility. Seshasayee Paper & Boards recorded quarterly sales of INR 386.88-crore and PAT of INR 18.64-crore. While the company remained profitable, revenue declined 9.52% and profit fell nearly 40%, signalling demand moderation in certain grades. Andhra Paper reported relatively stronger revenue growth of 5.56%, with quarterly sales reaching INR 418.69-crore. However, profit declined sharply by 84.3% to INR 9.85-crore, underlining severe margin compression.

In its sixty-sixth annual report, South India Paper Mills has announced that its revenue from operations for FY 2024-25 increased by 18.25%. Operations at the paper mill improved to 66.43% of the new capacity of PM6 machine.