Companies making paper have gone through tough times in the last few years.
On one end they had to deal with higher raw material prices and on the other hand lower finished goods prices. The profits are tending towards cyclical lows and similarly the valuations on metrics like Price to book value and market cap to sales are also closer to covid-19 lows.
Here are the notes from Kuantum’s Q1 FY27 earnings call and investor presentation, but before that:
Spread the Word: If you think our stock recommendations could add value to your friends, relatives, or acquaintances, we’d appreciate you spreading the word about Katalyst Wealth.
Latest Stock recommendations under Alpha, Alpha +, and Insider Bets memberships you can participate in:
- New Alpha & Alpha+ stock recommendation expected in 3-4 days, i.e. before end of August 2026
- Insider Bets (Released: 8th Jul ’26) A rare setup: Promoter increasing stake + business transformation + Reasonable valuations. Three green flags in one stock. (opens in new tab)Access this idea by signing up →
- Alpha & Alpha+ (Released: 2nd Jun ’26) A first-mover in a $7 billion global recycling opportunity — with proprietary technology that addresses a problem no one has cleanly solved yet. (opens in new tab)Read the full recommendation →
Kuantum Papers: 36% revenue growth, but profit fell 95%…Can profits recover?
Notes from the presentation and concall:
The headline numbers
- Operational income: ₹304 Cr, up 36% YoY, on 42,922 MT of paper sold (+35% YoY)
- EBITDA: ₹40 Cr, EBITDA margin just 13.2% — down sharply from 27.5% in FY24 and 21.9% in FY25
- PAT: ₹6 Cr, PAT margin down to ~2%
- Cost per ton rose ₹4,200 QoQ; the company only managed to pass through ₹3,400 of that via pricing — the rest ate into margins
Why margins fell
- Management attributes roughly 50% of the cost increase directly to the West Asia conflict — higher fuel, chemicals, and freight
- The other half is local: Punjab-specific raw material cost pressure, mainly wheat straw, where Kuantum sources agro pulp
- Management says wheat straw prices are now cooling as alternate cattle fodder (rice straw, corn cobs) becomes available post-September
Guidance was walked back mid-call
- Last quarter’s guidance: ₹1,400–1,500 Cr revenue for FY27
- This quarter: management revised it down to “₹1,300 Cr plus”
- An analyst pointed out the maths didn’t reconcile (₹1,300 Cr top line at 18-20% EBITDA doesn’t match the ₹300 Cr EBITDA and ₹175 Cr/year debt prepayment plan management described) — management’s response was that the earlier guidance assumed a sales realization that didn’t hold up, compounded by the West Asia cost shock
Capacity and debt story
- PM3, the last machine in the company’s upgradation program, is being commissioned this month, taking total paper capacity to 540 TPD
- Peak debt is guided at ₹760–770 Cr, with ~₹170-175 Cr/year repayment for the next 2-3 years, targeting under ₹300 Cr in 3 years
- Management expects EBITDA margins to recover to 16-18% by year-end, with Q3 FY27 flagged as the quarter where “full efficiency” operations should show up in the numbers — Q2 is explicitly called out as the industry’s seasonally weakest quarter
Where the company sees upside
- Specialty paper (oil & grease resistant paper, base paper for cups/straws) currently ~18-19% of revenue, targeted to reach 30%
- Anti-dumping/anti-subsidy duty applications already filed with the government on copier and Maplitho paper imports — a decision, if favorable, would apply for 5 years
- Imports are described as “diminishing” due to global shipping cost pressure, which management views as a structural positive for domestic realizations
We track companies like this — solid balance sheets, low-key execution, before they show up on everyone’s radar — and break down the numbers that actually matter in our research.
As always, this is not a stock recommendation — This note is for informational purposes only and not a buy/sell recommendation. Please do your own due diligence before investing.
Hope you found the blog post useful and it added value to your investment decisions. Sign up for more interesting stock ideas and industry notes.
Not a research subscriber yet?
If you found this useful, our paid members get full research reports with entry levels, financial models, and entry-exit updates on stocks like these.
(opens in new tab)Explore Katalyst Wealth subscriptions →
Disclaimer: This is not a recommendation to buy/sell any of the stocks mentioned above. The securities quoted are for illustration only and are not recommendatory.
Ekansh Mittal
Research Analyst
SEBI Research Analyst Registration No. INH100001690
Research Analyst Details
Name: Ekansh Mittal Email Id: (opens in new tab)[email protected] Ph: +91 727 5050062
Details of Associate: Not Applicable
Analyst Certification: The Analyst certify (ies) that the views expressed herein accurately reflect his (their) personal view(s) about the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report.
Disclaimer: (opens in new tab)http://www.
Registered Address – 7, Panch Ratan, 7/128, Swaroop Nagar, Kanpur – 208002
Place of Business – 205, Ratan Floor, 113/120, Swaroop Nagar, Kanpur – 208002
Compliance Officer/Grievance Redressal – Mr. Ekansh Mittal, +91-9818866676, (opens in new tab)info@
“Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors”.
“Investment in securities market are subject to market risks. Read all the related documents carefully before investing.”
The views expressed are based solely on information available publicly and believed to be true. Investors are advised to independently evaluate the market conditions/risks involved before making any investment decision
This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. Ekansh Mittal/Mittal Consulting/Katalyst Wealth is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for your information and should not be reproduced or redistributed to any other person in any form. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Ekansh Mittal or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Neither Ekansh Mittal, nor its employees, agents nor representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. Ekansh Mittal/Mittal Consulting or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement.
The recipients of this report should rely on their own investigations. Ekansh Mittal/Mittal Consulting and/or its affiliates and/or employees may have interests/ positions, financial or otherwise in the securities mentioned in this report. Mittal Consulting has incorporated adequate disclosures in this document. This should, however, not be treated as endorsement of the views expressed in the report.
We submit that no material disciplinary action has been taken on Ekansh Mittal by any regulatory authority impacting Equity Research Analysis.
Use of Artificial Intelligence: RA may infrequently use Artificial Intelligence (AI) tools like chatgpt, notebooklm, etc. in its research services to enhance the quality and efficiency of the recommendations provided to clients. The tools are primarily used for data collection and generating con-call summaries for the purpose of research.
In accordance with Regulation 24(7) of the SEBI (Research Analyst) Regulations, 2014: We take full responsibility for the security, confidentiality, and integrity of client data used in conjunction with AI tools and we ensure compliance with applicable laws regarding the use of AI tools.
Disclaimer: You can access it here – (opens in new tab)LINK
Whether the research analyst or research entity or his associate or his relative has any financial interest in the subject company/companies and the nature of such financial interest – No
Whether the research analyst or research entity or his associates or his relatives have actual/beneficial ownership of 1% or more securities of the subject company (at the end of the month immediately preceding the date of publication of the research report or date of the public appearance) – No
Whether the research analyst or research entity or his associate or his relative has any other material conflict of interest at the time of publication of the research report or at the time of public appearance – No
Whether it or its associates have received any compensation from the subject company in the past twelve months – No
Whether it or its associates have managed or co-managed public offering of securities for the subject company in the past 12 months – No
Whether it or its associates have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past 12 months – No
Whether it or its associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months – No
Whether the subject company is or was a client during twelve months preceding the date of distribution of the research report and the types of services provided – No
Whether the research analyst has served as an officer, director or employee of the subject company – No
Whether the research analyst or research entity has been engaged in market making activity for the subject company – No