South India Paper Mills returned to profitability in the financial year ended March 31, 2026, reporting a net profit of ₹1,074.11 lakh compared to a net loss of ₹964.07 lakh in the previous year. The turnaround was driven by a 17.5% increase in revenue from operations, which rose to ₹43,381.21 lakh from ₹36,931.47 lakh in FY25. The Board of Directors approved the audited financial results during a meeting held on May 28, 2026.

Financial Performance

For the quarter ended March 31, 2026, the company posted a net profit of ₹457.21 lakh, a significant improvement from the net loss of ₹225.72 lakh recorded in the corresponding quarter of the previous year. Revenue from operations for the quarter stood at ₹11,398.69 lakh, up from ₹9,414.36 lakh in the same period last year. Total income for the full year reached ₹43,449.20 lakh.

The company’s profit before tax for FY26 was ₹1,434.87 lakh, a sharp reversal from the loss before tax of ₹1,278.49 lakh in FY25. Basic earnings per share for the year improved to ₹5.73 from a loss of ₹5.14 per share in the prior year.

Operational Highlights

Total expenses for the year increased to ₹42,014.33 lakh from ₹38,406.74 lakh, primarily due to higher material costs and employee benefit expenses. The cost of materials consumed rose to ₹25,314.90 lakh, while employee benefits expenses increased to ₹3,378.73 lakh. Finance costs for the year amounted to ₹2,027.08 lakh.

Balance Sheet and Cash Flows

The company’s total assets as of March 31, 2026, stood at ₹44,872.60 lakh, slightly higher than ₹44,308.89 lakh in the previous year. Total equity increased to ₹22,228.43 lakh from ₹21,118.35 lakh, bolstered by the return to profitability. Borrowings decreased, with non-current borrowings at ₹7,162.72 lakh and current borrowings at ₹8,426.84 lakh.

Cash flow from operating activities improved to ₹4,255.45 lakh for the year, compared to ₹4,029.04 lakh in FY25. The company utilized cash for financing activities, primarily for repayment of borrowings and finance costs, resulting in a net cash outflow of ₹3,897.08 lakh. Cash and cash equivalents at the end of the year stood at ₹335.30 lakh.

Auditor's Report

M/s B S Ravikumar and Associates, Chartered Accountants, audited the financial results and issued an unmodified opinion. The statutory auditors confirmed that the financial statements give a true and fair view of the company’s financial position and performance in conformity with Indian Accounting Standards. The filing was submitted to BSE Limited under reference number BSE/AFR/2026.

South India Paper Mills Limited will acquire a 26% stake in Clean Wind Power (Manvi) Pvt Ltd for ₹14,00,000 to secure 11.6 million units of wind power annually for its industrial operations. The company entered into a Share Subscription cum Shareholder's Agreement (SSSHA) with Clean Wind Power (Manvi) Pvt Ltd and Hero Rooftop Energy Pvt Ltd to subscribe for 1,40,000 equity shares at a face value of ₹10 each. Additionally, a Power Supply and Consumption Agreement (PSCA) was signed to facilitate the supply under a Group Captive Structure.

The investment is not a related party transaction, as Clean Wind Power (Manvi) Pvt Ltd is a Special Purpose Vehicle promoted by Hero Rooftop Energy Pvt Ltd, which holds no relation to the promoter or promoter group of South India Paper Mills. The acquisition targets the renewable energy power generation sector to meet the energy requirements of the company's facilities located at Chikkayanachatra, Nanjangud, Thandavapura, and a river pump house.

Financials of the Target Entity

Clean Wind Power (Manvi) Pvt Ltd, incorporated on July 14, 2014, operates as an Independent Power Producer in Karnataka. The target entity has reported a decline in revenue from operations over the last three years.

Transaction Details

The transaction involves a cash consideration of ₹14,00,000 for the acquisition of 1,40,000 equity shares. The indicative timeline sets the completion of the acquisition within July 2026, with the start of power supply tentatively scheduled for August 1, 2026. No specific governmental or regulatory approvals are required for this acquisition.