Ruchira Papers Q2 profit dips 11.7% amid rising costs

Ruchira Papers reported a decline in profitability for the second quarter of fiscal year 2026 (Q2 FY26). The company’s standalone profit after tax (PAT) for the quarter ended 30 September 2025, fell by 11.76% year-over-year to INR 15.60-crore (INR 1,559.50-lakh). Revenue from operations (RFO) remained relatively flat, registering a marginal increase of 0.75% to INR 166.68-crore (INR 16,667.96-lakh).

The decline in Q2 profit, despite stable revenue, points to significant margin pressure. Cost of materials consumed for the quarter jumped by 7.04% year-over-year to INR 111.69-crore (INR 11,169.31-lakh), indicating higher raw material costs, a challenge observed across the paper industry. Sequentially, the Q2 PAT also dropped by 8.16% compared to the INR 16.98-crore (INR 1,698.00-lakh) reported in the preceding quarter (Q1 FY26). For the full half-year (H1 FY26), PAT remained largely flat, increasing by just 0.38% to INR 32.58-crore (INR 3,257.50-lakh).

In a move signalling a major expansion, Ruchira Papers significantly ramped up its investments in fixed assets. The company's capital work in progress (CWIP) soared to INR 156.30-crore (INR 15,629.89-lakh) as of 30 September 2025, compared to just INR 30.28-crore (INR 3,027.88-lakh) at the end of the previous fiscal year. This massive increase of over 400% suggests a large-scale capacity or infrastructure augmentation project is underway at its facility in Kala Amb.

To finance this ambitious capital expenditure, the company’s non-current (long-term) borrowings increased sharply from INR 27.26-crore (INR 2,725.83-lakh) in March 2025 to INR 111.59-crore (INR 11,158.59-lakh) by September 2025. The company continues to operate in a single business segment of paper and has prepared its results in accordance with Indian Accounting Standards (Ind AS).