Your company is a Public Limited entity established in the year-1979 and is engaged in the manufacturing of Writing and Printing Paper with present capacity of 94,000 MTs per annum. The manufacturing units are situated at two locations-- (i) Ahmedgarh, District Malerkotla, Punjab and (ii) Village Banah, District S.B.S. Nagar, Punjab.
India ranks in the first five largest producers of paper globally & contributes to roughly 5% of the paper demand in the world. Paper industry in the country having approximately 900 mills on record is composed of capacity ranging from 15-20 MTs per day to 1000 MTs plus per day. Out of this, nearly 400 mills are not operational. While total annual installed capacity is estimated at 29.2 Million Tons approximately but the operating capacity at present is estimated at 24-25 million tons per annum. Considering estimated capacity utilization at 90% plus, production of paper, paper board and newsprint is estimated at 23 million tons/year which almost matches the domestic consumption. Imports of paper at 3.03 million tons/year during this year (3.05 million tons in the year 2023-24) are far ahead of exports at 1.65 million ton/year. Coated grade paper and writing-printing paper imports at competitive prices have significantly surged during the last year as well as current year.. Based on the raw material used, Paper Mills are divided into three categories namely wood-based, agro-based and waste paper based [recycled fiber]. Your Company uses agro residues, viz. wheat straw, kangaroo grass, baggase as the primary raw material. In the country, Waste paper based mills contribute about 75% of paper production of which nearly 65% (Approx.15 Million tons/year) happens to be Packaging and paper board segment. Agro based mills contribute nearly 6% and the remainder comes from wood based mills.
Newsprint, Writing and Printing papers, Packaging, Paper Boards for packaging applications, Tissue Papers & other Specialty Paper are broad categories of papers manufactured in the country. The demand for writing & printing paper in domestic market continues to be normal with of course ups & downs of peak and lean seasons. Packaging paper & paper board segment is growing at a faster pace due to demand for packaging from e-commerce, food and food products, FMCG and the pharmaceutical sector.
The global paper industrys growth at a compounded annual rate of around 1.0% is quite less which is also largely due to packaging segment. The Indian paper market is the fastest growing market mainly on account of packaging and paper board segment. The domestic market for writing & printing paper is s growing at about 3% year on year although in long run, its prospective may not be as bullish as it used to be historically. Market share of these categories has come down to less than 30% in the last decade while packaging and paper boards share has increased to 65%. The paper consumption in India is likely grow @ 6-7 % annually and may reach around 30 million tons in the next 5 years. This is likely to occur mainly due to emphasis on education and literacy, phenomenal growth in organized retail/e-commerce. The paper industry holds immense potential for growth in India as its per capita consumption is one of the lowest at 15 kgs as against worlds average of around 57-60kgs. Single use plastic manufacturing is one of the major source of gas emissions and harmful for environment. It, being under active radar of the Government, is giving way to paper based packaging. Government policy for abolishing plastic is expected to gradually create more avenues for paper specially packaging sector.
There are always some challenges for the paper industry to develop new products, innovate and transform for green manufacturing. Sustainability in terms of capability to innovate, adapt and transform from time to time is the order of the day. All this apart obligations towards environment and society at large will have its own impact on the overall operational viability.
One of the main challenges for the Paper industry is required availability of raw materials at normal prices. India by & large is deficient of fibre, be it is wood, agricultural residue or recycles fiber/waste paper. Raw material is a major cost component for production of paper. This lone component adversely affects the cost competitiveness of the Indian Industry as compared to others competing countries.
The paper industry is working in the direction of adopting innovative technologies which could enable it to increase the production with better efficiencies. With more emphasis on proper utilization of agro-residuals which are traditionally burnt, the availability of agricultural residues can be further improved for the paper industry.
FINANCIAL PERFORMANCE AND ANALYSIS
The discussions in this section relate to the financial results pertaining to the year ended March 31, 2025 prepared in accordance with the Indian Accounting Standards [referred to as Ind AS] prescribed under section 133 of the Companies Act, 2013, read with the Companies [Indian Accounting Standards] Rules, as amended from time to time. Significant accounting policies used in the preparation of the financial statements are disclosed in the notes to the financial statements.
The following table gives an overview of the financial results of the Company.
(Rs In lakhs)
Year ended 31 March 2025 |
% of Revenue |
% Growth/(Fall) |
Year ended 31 March 2024 |
% of Revenue |
|
| Revenue from operations | 61,676.63 |
100.00% |
(11.78)% |
69,916.82 |
100.00% |
| Earnings before interest, tax, depreciation and amortisation (before other income) | 6,952.13 |
11.27% |
(28.76)% |
9,758.97 |
13.96% |
| Profit Before Tax (PBT) | 6,774.83 |
10.98% |
(40.95)% |
11,473.93 |
16.41% |
| Profit after tax attributable to shareholders of the Company | 5,038.85 |
8.17% |
(42.72)% |
8,797.54 |
12.58% |
| Earnings per share (in F) | 36.60 |
- |
- |
63.24 |
- |
KEY FINANCIAL RATIOS
In accordance with the SEBI [Listing Obligations and Disclosure Requirements 2018] [Amendment] Regulations, 2018, the Company is required to give details of significant changes [change of 25% or more as compared to the immediately previous financial year] in key financial ratios. The Company has identified the following ratios as key financial ratios:
Unit |
Year ended 31 March 2025 |
Year ended 31 March 2024 |
% Change |
|
| Return on Equity Ratio | % |
12.50 |
25.53 |
(51.04) |
| Debt Service Coverage Ratio | Times |
4.99 |
7.50 |
(33.47) |
| Interest Service Coverage Ratio | Times |
19.05 |
30.11 |
(36.73) |
| Return on Capital Employed | % |
14.81 |
27.58 |
(46.30) |
| Return on Investment | % |
8.45 |
18.82 |
(55.10) |
| Net Profit Ratio | % |
10.98 |
16.41 |
(33.09) |
RATIOS WHERE THERE HAS BEEN A SIGNIFICANT CHANGE AS COMPARED TO PREVIOUS YEAR
Decrease in operational profit resulted in downfall in debt service coverage ratio and interest service coverage ratio. Decrease in profit after tax resulted in downfall in return on equity. Lower operational profit & investment gain resulted in decrease in net profit ratio, return on capital employed and return on investment.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has well defined internal control system that corresponds to the size, scope and complexities of its activities. The Company takes abundant care to design, review and monitor the working of its internal control system. Internal controls are also in place to guarantee that all assets are safeguarded and protected against loss due to unauthorized use or disposition, and that transactions are properly authorized, recorded, and reported. Internal Audit in the organization is an independent appraisal activity and it measures the efficiency, adequacy and effectiveness of other controls in the organization. All significant issues are brought to the attention of the Audit Committee of the Board.
HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS
The human resources development function of the Company is guided by a strong set of values and policies. Your company strives to provide the best work environment with ample opportunities to grow and explore. Your company maintains a work environment that is free from undue stress and harassment. Company enjoys excellent relationship with its personnel and considers them as an essential part of the organization.
Development and well-being of people working for the Company has been a corner stone of the management policy. This is reflected through very low employees turnover at all levels including workers, staff, officers and managers. Company lays special emphasis on staff training and retraining through internal workshops and also nominating staff/officers to various training programs. The total number of permanent employees in the Company is 1373 as on 31st March, 2025. The employee relations continue to be cordial and harmonious at all the locations of the Company.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The CSR programmes of the Company are aimed at inclusive development and welfare of the local community by carrying out activities primarily related to promoting health care, promoting education and skill development. The company has identified several projects in the local surrounding areas to enhance community welfare. The Company partnered with several NGOs to foster skill development among women/ freshers and enhance their employability, create positive change for education, healthcare and rural development etc. The Company continued providing free notebooks and educational material, as well financial assistance to various students to pursue further education. As the company believes strongly in education being the means to better living for people and thereby adding to the nations development.
OUTLOOK
The paper industry has managed successfully all global or indigenous crisis during the last few years. The industry has recovered well from local issues and global disturbances caused by conflicts between some countries from time to time.
Some noticeable facts such as rapid urbanization, increase in disposable income and sustainable trends augur well for the paper industry in the country. After achieving good performance during the last few financial years, we hope to continue the journey in FY 2025-26 too. Implementation of National Education Policy (NEP) 2020 and Samagra Shiksha Scheme along with other measures by Indian Government in field of education & literacy should lend considerable boost to the demand for writing and printing paper.
Thrust on reducing/eliminating the use of single use plastic is going to support sustainable products such as paper. In recent years, India has become one of the large consumers of paper and paper board products though per capita consumption in India is much lower than worlds average. Although packaging is leading the growth story yet writing & printing paper is also proliferating due to increasing business activity and development of education sectors. The market size for writing & printing paper is quite good but not as big as the packaging segment. Thus domestic market opportunities are quite promising and healthy. Further cost of manufacturing in India is quite competitive as compared to China which may help India gain and corner major chunk of global demand.
CAUTIONARY STATEMENT
Statements in this report on Management discussion and analysis relating to the Companys objectives, estimates, expectations or predictions may be forward looking statements within the meaning of applicable security laws or regulations. These statements are based upon certain assumptions and expectations of future events. Actual results could however differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and domestic demand-supply conditions, selling prices, raw material costs and availability, changes in government regulations and tax structure, general economic developments in India and abroad, factors such as litigation, industrial relations and other unforeseen events.
Statements in this report on Management discussion and analysis relating to the Companys objectives, estimates, expectations or predictions may be forward looking statements within the meaning of applicable security laws or regulations. These statements are based upon certain assumptions and expectations of future events. Actual results could however differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and domestic demand-supply conditions, selling prices, raw material costs and availability, changes in government regulations and tax structure, general economic developments in India and abroad, factors such as litigation, industrial relations and other unforeseen events.
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