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.

Pakka Limited has received a significant boost for its Jagriti Project as the Uttar Pradesh government's Evaluation Committee approves and recommends fiscal incentives worth Rs. 224.47 crores. This development marks a crucial step forward for the company's investment plans in the state.

Key Highlights

• The Evaluation Committee of Invest UP has approved and recommended fiscal incentives of Rs. 224.47 crores for Pakka Limited's Jagriti Project.
• The incentives fall under the Uttar Pradesh Industrial Investment and Employment Promotion Policy, 2022.
• Pakka Limited applied for these incentives on July 23.
• The Evaluation Committee has recommended the proposal to the Uttar Pradesh Government for issuing a Letter of Comfort (LOC).
• Final approval is subject to the state cabinet's decision.
• If approved, the fiscal incentives will be distributed over 15 years from the start of commercial production.

Details of the Approval Process

Pakka Limited, in a filing to the stock exchanges on September 16, disclosed that it had applied for various fiscal incentives under the Uttar Pradesh Industrial Investment and Employment Promotion Policy, 2022. The application, submitted on July 23, was for investments made or to be made in the company's 'Jagriti Project'.

The Evaluation Committee of Invest UP, after reviewing the application, has approved and recommended the proposal to the Uttar Pradesh Government. This recommendation is a crucial step towards the issuance of a Letter of Comfort (LOC) for the investments related to the Jagriti Project.

Implications and Next Steps

While this approval and recommendation from the Evaluation Committee is a positive development for Pakka Limited, it's important to note that the fiscal incentives are not yet finalized. The proposal now awaits the approval of the Uttar Pradesh Government's cabinet.

If approved by the state cabinet, these fiscal incentives will provide substantial support to Pakka Limited's Jagriti Project over an extended period. The company stands to benefit from Rs. 224.47 crores in incentives, distributed over 15 years from the date of commercial production.

This development aligns with Uttar Pradesh's efforts to promote industrial investment and employment in the state through its 2022 policy initiative. For Pakka Limited, these incentives could significantly enhance the financial viability and long-term prospects of the Jagriti Project.

Investors and stakeholders will be keenly watching for the final approval from the state cabinet, which will determine the ultimate impact of these fiscal incentives on Pakka Limited's operations and financial outlook in Uttar Pradesh.