Pakka Limited , a paper and packaging company, has reported no deviations in the utilization of funds from its Rs 244.80 crore preferential issue for the quarter ended September 30, 2025. The company's statement, reviewed by its audit committee and board of directors, provides insights into its financial activities and ongoing projects.

Fund Utilization and Project Progress

The preferential issue, comprising Rs 146.88 crore from equity shares and Rs 97.92 crore from fully convertible warrants, has been partially utilized as follows:

During the second quarter of FY2026, the company invested Rs 2.75 crore in plant machinery procurement for the Jagriti Project, demonstrating ongoing progress in its expansion plans.

Warrant Exercise Timeline Extension

Shareholders approved extending the warrant exercise timeline from 12 to 18 months from the allotment date. This extension, approved at the 45th Annual General Meeting on September 30, 2025, provides warrant holders additional time to convert their warrants into equity shares.

Financial Performance and Operational Challenges

Pakka Limited experienced a revenue decline to Rs 82.24 crore in the quarter, primarily due to a plant shutdown between June 16 and July 24, 2025. This shutdown, part of the phased rollout of Project Jagriti, was undertaken to support the expansion of paper machine 3 and the pulp machine. The temporary closure resulted in zero pulp sales during the period, adversely affecting both revenue and profit margins.

Management Changes

The company announced a change in its leadership. Jagdeep Hira, the Managing Director and a Key Managerial Personnel, resigned citing health-related concerns. Ved Krishna, a promoter of the company, has taken over as the new Executive Director.

Market Challenges

CARE Ratings Limited, the monitoring agency, noted a potential challenge: the company's share price is currently trading significantly below the warrant exercise price of Rs 272. As of November 5, 2025, Pakka Ltd's shares were trading at Rs 140.55, compared to Rs 209.60 on June 30, 2025. This substantial decline may impact the likelihood of warrant conversion, potentially affecting the company's capital raising plans.

While Pakka Limited continues to make progress on its expansion projects, it faces challenges in terms of market perception and operational disruptions. The company's ability to navigate these challenges while continuing its growth initiatives will be crucial for its future performance.

Jagriti Project Revisions

Pakka Limited , a leading paper and pulp manufacturer, has announced its unaudited financial results for the second quarter and half-year ended September 30, 2025, along with significant updates to its ongoing Jagriti Project.

The company has revised the estimated cost of its Jagriti Project from Rs. 675.00 crore to Rs. 750.00 crore, citing alterations in machinery and infrastructure. Additionally, the commercial production date has been pushed back from April 1, 2026, to August 1, 2026.

Management stated that appropriate steps have been taken to mitigate further delays and control costs. They emphasized that no material change is expected in the project's overall viability or profitability, and it continues to be a key part of the company's long-term growth strategy.

Financial Performance

Pakka reported a significant year-over-year decline across key financial metrics for the quarter:

• Net profit dropped to Rs. 3.00 million from Rs. 205.00 million in the same quarter last year.
• Revenue fell to Rs. 758.00 million compared to Rs. 1,110.00 million previously.
• EBITDA decreased to Rs. 46.50 million from Rs. 231.70 million.
• EBITDA margin compressed to 6.13% from 20.86% year-over-year.

This downturn may be attributed to various factors, including the temporary plant shutdown for expansion.

Operational Highlights

• The company's plant was shut from June 16 to July 26, 2025, for the expansion of production facilities as part of Project Jagriti.
• The Board of Directors approved a revised Corporate Social Responsibility (CSR) policy during the quarter.
• Pakka Limited extended the ESOP-2021 end date from December 31, 2026, to December 31, 2031.
• The validity period of outstanding warrants was extended from 12 months to 18 months.

Segment Performance

Both segments experienced challenges during the quarter, with the Paper & Pulp segment showing a significant decline in profitability compared to the previous year.

Future Outlook

While the company faces short-term challenges, including project delays and increased costs, management remains optimistic about the long-term prospects of the Jagriti Project. The expansion and modernization efforts are expected to enhance Pakka Limited's production capabilities and market position in the coming years.

Investors and stakeholders will be closely monitoring the progress of the Jagriti Project and the company's ability to navigate the current headwinds in the paper and pulp industry.