South India Paper Mills reported a net profit of ₹497.79 lakh for the quarter ended June 30, 2026, marking a substantial recovery from the ₹98.16 lakh profit recorded in the corresponding quarter of the previous year. Revenue from operations increased to ₹11,758.39 lakh, compared to ₹10,688.84 lakh in Q1FY26. The results were approved by the Board of Directors at a meeting held on July 30, 2026, and reviewed by statutory auditors B S Ravikumar & Associates.

The company’s total income stood at ₹11,775.83 lakh, driven primarily by operational revenue which accounted for the vast majority of inflows. Other income contributed a marginal ₹17.44 lakh. On the expense side, total costs amounted to ₹11,110.49 lakh. Cost of materials consumed was ₹6,500.81 lakh, while employee benefit expenses totaled ₹915.13 lakh. Finance costs decreased to ₹457.80 lakh from ₹510.12 lakh in the prior year period, indicating improved interest burden management.

Financial Performance Highlights

The profit before tax surged to ₹665.34 lakh from ₹131.21 lakh in the previous year. Tax expenses included a deferred tax credit of ₹167.55 lakh, contributing to the bottom-line improvement. Earnings per share (basic and diluted) rose to ₹2.65 from ₹0.52 in the corresponding quarter of FY26.

What the Numbers Show

The primary driver of the profit surge is the divergence between revenue growth and expense growth. While revenue increased by approximately 10% year-on-year, total expenses grew by only 5.1%. This operational leverage suggests better cost control or favorable input price dynamics relative to selling prices. Specifically, finance costs declined despite stable revenue levels, reducing the drag on profitability. The company operates in a single segment, Paper and Paper Products, meaning these results reflect consolidated performance without diversification offsets.

Regulatory Disclosures

The results have been subjected to a limited review by B S Ravikumar & Associates, Chartered Accountants, Mysore, pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Audit Committee reviewed the accounts before Board approval. The company noted that its existing employee emolument structure is broadly in line with the New Labour Codes notified by the Government of India on November 21, 2025, and no material impact is currently envisaged. There were no pending investor complaints at the beginning or end of the quarter, with three complaints received and resolved during the period.

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.