Pakka Limited has reported a decline in revenue and a loss for the second quarter, while also announcing significant expansion plans in the US market.

Financial Performance

Pakka's financial results for Q2 show:

All figures in crores

The company experienced a slight year-on-year revenue decline in Q2, along with a shift from profit to loss compared to the same quarter in the previous year.

Project Updates

Project Jagriti

Initially planned for commissioning within the current financial year, this project has been optimized with a new target date of July 2026.

US Market Expansion

Pakka is developing a 40 TPD moulded product facility in Guatemala:

• Total investment: USD 55 million
• Target stabilized turnover: USD 36 million by 2028
• Target EBITDA: USD 12 million by 2028
• Planned equity investment: USD 16.5 million
• Debt financing: Letter of intent received for USD 38.5 million

Business Segment Performance

Food Services Division

• B2C revenue doubled in the last 6 months
• Successful launch of clamshells, generating ₹20 lakh in sales in the first month

Market Positioning

Despite the short-term financial challenges, Pakka continues to focus on growth and expansion, particularly in international markets. The company's investment in Guatemala demonstrates its commitment to expanding its global footprint in the sustainable packaging sector.

Conclusion

While Pakka faces some financial headwinds in the short term, its strategic investments and expansion plans, particularly in the US market, suggest a focus on long-term growth. The company's progress in the food services division and its planned facility in Guatemala indicate potential for future revenue growth and market expansion.

Investors and market watchers will likely monitor Pakka's ability to execute its expansion plans and return to profitability in the coming quarters.

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.