Pakka Limited reported a net profit of ₹3.07 lakh for the quarter ended March 31, 2026, marking a 4% decline from ₹3.19 lakh in Q1FY26. Consolidated revenue from operations grew 10% year-on-year to ₹101.43 lakh, driven by higher sales in its core paper and pulp segment. The Board of Directors approved the unaudited financial results on August 14, 2026.

The company’s independent auditors, C N K & Associates LLP, issued a qualified opinion on the consolidated financial statements. The qualification stems from uncertainty regarding the recoverability of ₹319.78 lakh recorded as capital work-in-progress (CWIP) at Pakka Inc., a wholly owned US subsidiary. Project activities at the entity were suspended in the preceding quarter due to financing gaps, and required funding had not been secured as of the report date.

Segment Performance

Revenue from the Paper & Pulp segment rose 5% YoY to ₹88.20 lakh, contributing significantly to the top-line growth. The Moulded Products segment saw a sharper increase, with revenue jumping 46% YoY to ₹16.87 lakh. However, profitability remained under pressure in the latter segment, which posted a pre-tax loss of ₹69.08 lakh compared to ₹26.81 lakh in the prior year quarter.

What the Numbers Show

A significant divergence exists between operating performance and reported profit. While profit before tax stood at ₹4.74 lakh, other income contributed only ₹3.64 lakh. More critically, finance costs surged 44% YoY to ₹3.85 lakh, up from ₹2.68 lakh in Q1FY26. This rise in borrowing costs, alongside a 35% jump in power and fuel expenses to ₹14.87 lakh, eroded the margin expansion potential from higher revenues. The total comprehensive income was boosted by a ₹19.61 lakh gain from foreign currency transition reserves, highlighting currency volatility as a key variable in bottom-line reporting.

Balance Sheet and Cash Flow

Total assets expanded 51% YoY to ₹1,116.65 lakh, primarily driven by a sharp increase in capital work-in-progress, which rose to ₹586.69 lakh from ₹158.90 lakh a year ago. Borrowings increased substantially, with long-term borrowings rising to ₹309.91 lakh and short-term borrowings to ₹149.23 lakh.

Cash and cash equivalents declined 73% YoY to ₹17.94 lakh, reflecting heavy capital expenditure of ₹373.25 lakh during the year. Operating cash flow remained positive at ₹75.13 lakh, but was insufficient to offset the investing outflows without additional financing inflows of ₹242.93 lakh.

Pakka Limited has seen an increase in pledged shares held by its debenture trustee, Catalyst Trusteeship Limited. The trustee disclosed the additional encumbrance under Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, on August 14, 2026.

The additional pledge involves 33,34,500 equity shares, representing 7.00% of the company’s total voting capital and 6.01% of its diluted voting capital. The transaction was executed on August 12, 2026.

Pledge Position Details

Prior to this transaction, Catalyst Trusteeship Limited held a pledge over 1,37,09,257 shares, which accounted for 28.76% of the total share capital and 24.70% of the diluted share capital. Following the new pledge, the total encumbered position stands at 1,70,43,757 shares.

The total equity share capital of Pakka Limited remains unchanged at ₹47,66,81,000, comprising 4,76,68,100 shares with a face value of ₹10 each. The total diluted share/voting capital is recorded at ₹55,50,91,000, based on 5,55,09,100 shares assuming full conversion of outstanding convertible securities.

Catalyst Trusteeship Limited acted in its capacity as Debenture Trustee for the benefit of Debenture Holders. The disclosure was signed by Deesha Srikanth, Senior Vice President, on behalf of the trustee.