Star Paper Mills net profit falls 14% in Q1FY27 to ₹1100 lakh
Star Paper Mills reported a 14.1% year-on-year decline in net profit to ₹1100.51 lakh for Q1FY27, despite a 2.3% increase in revenue from operations to ₹10,346.19 lakh. Total income rose to ₹11,740.15 lakh, aided by a 17.5% jump in other income to ₹1,393.96 lakh, largely due to unrealized gains on mutual fund investments. However, rising material costs (up 10.9%) and employee benefits (up 20.3%) pressured margins, causing profit before tax to fall 9.5% to ₹1,476.68 lakh. Basic EPS declined to ₹7.05 from ₹8.21.
*this image is generated using AI for illustrative purposes only.
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.
| Particulars | Q1FY27 (₹ Lakh) | Q1FY26 (₹ Lakh) | Change (%) |
|---|---|---|---|
| Revenue From Operations | 10,346.19 | 10,115.75 | +2.3% |
| Other Income | 1,393.96 | 1,186.66 | +17.5% |
| Total Expenses | 10,263.47 | 9,670.42 | +6.1% |
| Profit Before Tax | 1,476.68 | 1,631.99 | -9.5% |
| Net Profit | 1,100.51 | 1,280.92 | -14.1% |
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.
Historical Stock Returns for Star Paper Mills
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.04% | +8.81% | +9.98% | +24.83% | -4.09% | 0.0% |
How might the implementation of the new Labour Codes effective November 2025 impact Star Paper Mills' future employee benefit expenses and operational margins?
Given the 10.9% surge in material costs, what hedging strategies or supply chain adjustments is the company planning to mitigate input cost volatility in Q2FY27?
To what extent will the company's reliance on unrealized gains from mutual fund investments continue to buffer its net profit if market conditions turn volatile?
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