Company Overview

Kuantum Papers Ltd is a leading agro and wood-based paper manufacturer that began commercial operations in 1980 in Hoshiarpur, Punjab. Production started at 30 TPD and has grown to 540 TPD through continuous upgrades. The company utilizes agro residues (wheat straw, sarkanda, bagasse) along with wood chips, veneer waste, and bamboo. Its fully integrated manufacturing facility spans 259 acres. Product portfolio includes writing and printing papers (maplitho, cream wove) and specialty products like thermal paper, bond paper, parchment paper, with GSM range of 40–200. The company operates through 100+ dealers across India and exports to 24 countries. Marquee clients include Macmillan Education India, McGraw Hill Education India, Oxford University Press, and others. Social Farm Forestry Program covers 18,300+ acres with a target to expand to 75,000 acres by 2030.

Financial Performance Highlights

Quarterly Performance (Q4 FY26 vs Q4 FY25 vs Q3 FY26)

  • Operational Income: INR 3,009 Mn (up 8.5% YoY from INR 2,774 Mn; up 3.9% QoQ from INR 2,896 Mn)
  • Total Expenses: INR 2,531 Mn (up 16.4% YoY from INR 2,175 Mn; up 1.1% QoQ from INR 2,503 Mn)
  • EBITDA: INR 478 Mn (down 20.2% YoY from INR 599 Mn; up 21.6% QoQ from INR 393 Mn)
  • EBITDA Margins: 15.89% (down 570 bps YoY from 21.59%; up 234 bps QoQ from 13.55%)
  • Other Income: INR 12 Mn (down 14.3% YoY from INR 14 Mn; down 25.0% QoQ from INR 16 Mn)
  • Depreciation: INR 172 Mn (up 17.0% YoY from INR 147 Mn; up 3.6% QoQ from INR 166 Mn)
  • Finance Cost: INR 132 Mn (up 26.9% YoY from INR 104 Mn; up 21.1% QoQ from INR 109 Mn)
  • PBT: INR 186 Mn (down 48.6% YoY from INR 362 Mn; up 39.8% QoQ from INR 133 Mn)
  • Tax: INR 43 Mn (down 57.4% YoY from INR 101 Mn; up 19.4% QoQ from INR 36 Mn)
  • Profit After Tax: INR 143 Mn (down 45.2% YoY from INR 261 Mn; up 45.9% QoQ from INR 98 Mn)
  • PAT Margins: 4.75% (down 466 bps YoY from 9.41%; up 137 bps QoQ from 3.38%)
  • Diluted EPS: INR 1.64 (down 45.2% YoY from INR 2.99; up 46.4% QoQ from INR 1.12)

Annual Performance (FY26 vs FY25)

  • Operational Income: INR 10,932 Mn (down 1.2% YoY from INR 11,070 Mn)
  • Total Expenses: INR 9,314 Mn (up 7.8% YoY from INR 8,644 Mn)
  • EBITDA: INR 1,618 Mn (down 33.3% YoY from INR 2,426 Mn)
  • EBITDA Margins: 14.80% (down 712 bps YoY from 21.92%)
  • Other Income: INR 65 Mn (up 6.6% YoY from INR 61 Mn)
  • Depreciation: INR 653 Mn (up 20.9% YoY from INR 540 Mn)
  • Finance Cost: INR 464 Mn (up 18.1% YoY from INR 393 Mn)
  • PBT: INR 566 Mn (down 63.6% YoY from INR 1,554 Mn)
  • Tax: INR 146 Mn (down 63.7% YoY from INR 402 Mn)
  • Profit After Tax: INR 420 Mn (down 63.5% YoY from INR 1,152 Mn)
  • PAT Margins: 3.84% (down 657 bps YoY from 10.41%)
  • Diluted EPS: INR 4.81 (down 63.6% YoY from INR 13.20)

Historical Financial Performance (FY23-FY26)

  • FY23 EBITDA: INR 3,792 Mn (28.96% margin)
  • FY24 EBITDA: INR 3,330 Mn (27.49% margin)
  • FY25 EBITDA: INR 2,426 Mn (21.92% margin)
  • FY26 EBITDA: INR 1,618 Mn (14.80% margin)
  • FY23 PAT: INR 1,362 Mn (10.40% margin)
  • FY24 PAT: INR 1,838 Mn (15.17% margin)
  • FY25 PAT: INR 1,152 Mn (10.41% margin)
  • FY26 PAT: INR 420 Mn (3.84% margin)
  • FY23 Diluted EPS: INR 15.60
  • FY24 Diluted EPS: INR 21.07
  • FY25 Diluted EPS: INR 13.20
  • FY26 Diluted EPS: INR 4.81

Operational Highlights

  • Production volume for FY26 was 162,885 MT, maintained despite phased shuts for upgradation of three paper machines.
  • EBITDA decline attributed to drop in Net Sales Realization (NSR) by INR 2,000/MT coupled with cost increase of INR 3,200/MT.
  • Downward pressure on NSR due to influx of cheaper imports and Nil GST levied on notebook segment impacting market sentiment.
  • Q4 FY26 revenue increased 4% QoQ primarily due to improved NSR of INR 3,700/MT.
  • Cost rose by nearly INR 2,000/MT in Q4, driven by higher raw material, chemical, and fuel prices amid ongoing West Asia war.

Mill Expansion and Upgradation Projects

  • Paper Machine 2 Rebuild: Completed in March 2026, enhancing installed capacity to 75 TPD. Upgrades included dilution-control headbox, upgraded press section, wire part extension, DCS/QCS, additional dryers, Küsters calendar for DP control, tail shooters, and dry-end improvement.
  • Two-stage Recausticizing Plant: Commissioned at the Chemical Recovery Plant (CRP), reducing silica loading to Lime Kiln and improving process recovery efficiency.
  • Syncro Sheeter: Installed with 80 TPD capacity for higher precision cutting and efficiency, enabling elimination of manual sheet handling for online packing.
  • Displacement Digester System (DDS): For wood pulping, under extensive testing with commissioning targeted by mid-June 2026. Expected to enable lower-temperature pulp cooking, resulting in higher yield, improved product quality, and lower utility costs.
  • UASB (Upflow Anaerobic Sludge Blanket): Under erection at Effluent Treatment Plant (ETP), commissioning targeted by Q2 FY27. Will generate methane from wastewater as secondary clean fuel for boiler.

Plant Updates

  • Post rebuild of PM1 in December 2025, average daily production for Q4 increased by almost 20 TPD.
  • Project Nirmaan (Industry 4.0-led, AI-based transformation): MACS Blend Control initiated on PM4 for agro and wood, later optimized for softwood and broke. Enables furnish optimization leading to improved machine runnability and output.

New Product Development

  • Successfully developed and manufactured dye-free Kappa Premium III CRM with improved optical properties and high light-fastness OBA for enhanced color stability.

Environment and Sustainability

  • Added 854 acres of Social Farm Forestry in Q4 FY26, taking total area under plantation to 18,300+ acres.
  • Program has benefitted 19,100+ farmers in the community.

Balance Sheet Highlights (FY24-FY26)

Assets

  • Property, plant and equipment: INR 14,678 Mn (FY24), INR 16,013 Mn (FY25), INR 18,099 Mn (FY26)
  • Capital work-in-progress: INR 415 Mn (FY24), INR 1,552 Mn (FY25), INR 2,625 Mn (FY26)
  • Right of use assets: INR 0 (FY24), INR 0 (FY25), INR 99 Mn (FY26)
  • Inventories: INR 1,128 Mn (FY24), INR 1,262 Mn (FY25), INR 1,314 Mn (FY26)
  • Trade receivable: INR 342 Mn (FY24), INR 391 Mn (FY25), INR 443 Mn (FY26)
  • Cash and Cash equivalents: INR 706 Mn (FY24), INR 92 Mn (FY25), INR 409 Mn (FY26)
  • Total Assets: INR 18,877 Mn (FY24), INR 21,128 Mn (FY25), INR 23,989 Mn (FY26)

Liabilities and Equity

  • Equity share capital: INR 87 Mn (all three years)
  • Other equity: INR 11,151 Mn (FY24), INR 12,040 Mn (FY25), INR 12,196 Mn (FY26)
  • Total Equity: INR 11,238 Mn (FY24), INR 12,127 Mn (FY25), INR 12,283 Mn (FY26)
  • Borrowings (Non-current): INR 3,070 Mn (FY24), INR 4,027 Mn (FY25), INR 5,897 Mn (FY26)
  • Borrowings (Current): INR 2,055 Mn (FY24), INR 2,509 Mn (FY25), INR 2,701 Mn (FY26)
  • Lease liabilities (Non-current): INR 0 (FY24), INR 0 (FY25), INR 89 Mn (FY26)
  • Lease liabilities (Current): INR 0 (FY24), INR 0 (FY25), INR 10 Mn (FY26)
  • Total Liabilities: INR 7,639 Mn (FY24), INR 9,001 Mn (FY25), INR 11,706 Mn (FY26)

Market Data

  • Face Value: INR 1.0
  • Market Price: INR 66.1
  • 52 Week High/Low: INR 134.3/65.5
  • Market Cap: INR 5,767.3 Mn
  • Equity Shares Outstanding: 87.3 Mn
  • 1 Year Average Trading Volume: 65,900 shares

Future Growth Strategy

  • Debottlenecking and upgrading plant operations to increase production capacity by ~50% and further optimize cost
  • Leveraging single use plastic ban by developing specialty products portfolio for sustainable future
  • Exploring technology in specialty/tissue paper segment to diversify product portfolio
  • Harnessing Industry 4.0 including IoT, AI and cloud computing for operational efficiency and optimal resource utilization