Star Paper Mills reported a ₹32.75 crore net profit for the financial year ended March 31, 2026, down from ₹41.14 crore in the previous year. Revenue from operations declined to ₹4,099.4 crore, compared to ₹4,363.4 crore in FY25.

The Board of Directors recommended a final dividend of ₹2.50 per equity share (25%), subject to shareholder approval at the upcoming Annual General Meeting.

Financial Performance

Revenue from operations fell by approximately 6% year-on-year, reflecting subdued market conditions and competition from imports under Free Trade Agreements. The company cited lower realizations and slightly lower volumes as key factors impacting the top line.

What the Numbers Show

Operating profit margins contracted significantly to 8.57% in FY26, down from 12.25% in FY25. This divergence between relatively stable revenue decline and sharper margin compression indicates that input cost pressures outpaced any pricing adjustments the company could pass on to customers. Specifically, cost of materials consumed remained nearly flat at ₹2,019.9 crore despite lower sales volumes, suggesting an inability to reduce raw material procurement costs in line with reduced production output.

Additionally, while gross operating profits fell, other income remained robust at ₹236.4 crore, largely supported by gains on mutual fund investments and insurance claims. This reliance on non-operating income helped cushion the bottom-line impact of the operational margin squeeze.

Capital Expenditure and Outlook

The company is investing in efficiency improvements with two major projects underway: a 6.5 MV Turbine project costing ₹13.30 crore and a Chlorine Dioxide plant with a capital outlay of ₹30.95 crore. Both are expected to be commissioned by December 2026, aiming to reduce power costs and improve pulp brightness.

Management highlighted geopolitical tensions in the Middle East as a risk factor, noting potential supply shocks and energy price volatility. However, it expects domestic demand to grow in step with the broader economy.

Star Paper Mills reported a net profit of ₹1100.51 lakh for the quarter ended June 30, 2026, down 14.1% year-on-year from ₹1280.92 lakh in Q1FY26. Despite a modest 2.3% rise in revenue from operations to ₹10,346.19 lakh, profitability was pressured by higher cost of materials and employee benefits, partially offset by significant unrealized gains in other income. The company’s total income from operations stood at ₹11,740.15 lakh, up from ₹11,302.41 lakh in the corresponding quarter of the previous year.

The Board of Directors approved the unaudited financial results at a meeting held on August 12, 2026. The results were reviewed by the Audit Committee and subjected to a limited review by statutory auditors Lodha & Co LLP, in compliance with Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The full format of the quarterly financial results is available on the stock exchange websites and the company’s website.

Financial Performance Overview

Revenue from operations increased to ₹10,346.19 lakh from ₹10,115.75 lakh in the corresponding quarter of the previous year. However, total expenses rose to ₹10,263.47 lakh from ₹9,670.42 lakh, squeezing operating margins. Cost of materials consumed jumped 10.9% to ₹5,607.26 lakh, while employee benefits expense grew 20.3% to ₹890.91 lakh. Power and fuel costs also edged up 6.3% to ₹1,789.48 lakh.

Other income contributed significantly to the bottom line, rising 17.5% to ₹1,393.96 lakh. This increase was primarily driven by an unrealized gain of ₹946.52 lakh on fair valuation of mutual fund investments, compared to ₹1025.20 lakh in Q1FY26. The company’s basic earnings per share (EPS) stood at ₹7.05, down from ₹8.21 in the prior year. Total comprehensive income for the period was ₹1,103.12 lakh, compared to ₹1,292.71 lakh in Q1FY26.

What the Numbers Show

The divergence between operational performance and other income highlights the company’s reliance on investment gains to support profitability. While core revenue growth remained steady at 2.3%, operational costs expanded faster than income, leading to a 9.5% drop in profit before tax. The substantial contribution from unrealized gains on mutual funds—accounting for nearly 68% of total other income—suggests that underlying operational margins face headwinds from rising input and labor costs.

Regulatory and Operational Notes

The company operates in a single segment comprising paper, paper board, and related products. Management noted that current emoluments are broadly aligned with the new Labour Codes notified by the Government of India effective November 21, 2025. The company continues to monitor developments regarding related rules and regulations to evaluate any consequential adjustments.

The figures for the quarter ended March 31, 2026, represent balancing figures between audited full-year results and unaudited year-to-date figures up to December 31, 2025. Previous period figures have been reclassified where necessary to correspond with current period classifications.