Kuantum Papers Limited, a leading paper manufacturer, has reported a significant decline in its quarterly profit for the period ended September 30, 2025. The company's financial results reveal a challenging quarter marked by increased costs and reduced profitability.

Key Financial Highlights

Kuantum Papers reported a net profit of ₹5.77 crore for the quarter ended September 30, 2025, marking a substantial 80.70% decrease from ₹29.90 crore in the same quarter last year. The company's revenue from operations saw a marginal increase of 0.91%, rising to ₹278.42 crore from ₹275.90 crore in the corresponding quarter of the previous year.

Cost Pressures and Operational Challenges

The significant drop in profitability can be attributed to several factors:

1. Rising Finance Costs: The company's finance costs increased to ₹11.90 crore from ₹9.41 crore in the same quarter last year, indicating higher borrowing costs.

2. Increased Operational Expenses: Other expenses, including power and fuel costs and chemical consumption, saw a notable rise, impacting the company's bottom line.

3. Depreciation and Amortization: These expenses increased to ₹16.30 crore from ₹13.00 crore in Q2 2024, suggesting ongoing investments in assets.

Half-Yearly Performance

For the half-year period ended September 30, 2025, Kuantum Papers' performance also showed a downward trend:

• Revenue decreased by 9.82% to ₹500.34 crore from ₹554.84 crore in H1 2024.
• Net profit dropped by 73.82% to ₹17.83 crore from ₹68.09 crore in the same period last year.

Industry Context

The paper industry continues to face headwinds from increasing raw material costs and energy prices. Kuantum Papers' ability to manage these challenges and improve operational efficiency will be crucial for its performance in the coming quarters.

Kuantum Papers Limited , a leading player in the writing and printing paper industry, has announced significant changes in its credit rating arrangements and operational strategies. The company has withdrawn its credit ratings from CARE Ratings Limited and switched to India Ratings and Research, marking a shift in its financial assessment approach.

Credit Rating Transition

CARE Ratings has reaffirmed and withdrawn its ratings of 'CARE A-: Stable/CARE A1' for Kuantum Papers' bank facilities, effective immediately. This action follows the company's request and receipt of no-objection certificates from its banks. Additionally, CARE Ratings has placed the fixed deposit rating of ₹33.22 crore on notice of withdrawal for one year.

Financial Performance

Kuantum Papers experienced a challenging fiscal year, with its financial metrics showing some moderation:

The decline in performance is primarily attributed to the normalization of net sales realizations (NSR) following an abnormal post-COVID surge.

Q1 Performance and Strategic Initiatives

In the first quarter, Kuantum Papers reported:

• Total operating income: ₹222.92 crore (21% year-on-year decline)
• Production decline: From 41,315 metric tonnes in Q4 to 32,545 metric tonnes in Q1

The company underwent a strategic 35-day shutdown of its primary machine (PM4) from May 26 to June 29, for a comprehensive rebuild. This machine accounts for approximately 56% of the plant's total capacity.

Expansion Project

Kuantum Papers is undertaking a significant expansion project valued at approximately ₹735 crore. Key aspects of this project include:

• Capacity enhancement from 450 TPD to 675 TPD
• Upgrade of turbine from 38 MW to 41.5 MW
• Installation of new centrifugal compressors for power cost reduction
• Addition of 50 TPD specialty grade coated paper capacity

The project is being funded through a mix of term loans (₹535 crore) and internal accruals. As of March 31, about 45% of the project has been completed.

Environmental and Social Initiatives

Kuantum Papers continues to prioritize sustainability in its operations:

• Utilization of agro-residues like wheat straw, sarkanda, and bagasse
• Expansion of Social Farm Forestry Program to 13,870 acres
• Commissioning of a surface water treatment plant
• Implementation of AI-based process controls for improved energy efficiency

Outlook

While Kuantum Papers faces challenges in the short term due to its ongoing expansion and the recent production disruption, the company's strategic initiatives aim to enhance its long-term competitiveness and sustainability in the paper industry. Investors and stakeholders will be keenly watching how these changes impact the company's performance in the coming quarters.