Nath Industries Ltd Q2 FY26 – When Paper Meets Chemistry and Somehow Manages 633% Profit Growth!
1. At a Glance
Nath Industries Ltd just pulled off a quarterly miracle that even the gods of pulp and sulphur didn’t see coming. The ₹119 crore market-cap company, known for making paper, chemicals, and unintentionally confusing investors with both, reported a PAT of ₹4.4 crore for the September 2025 quarter — up 633% YoY, on a revenue of ₹127 crore (+31.9% YoY). The stock is lounging at ₹62.6, which is less than half its book value of ₹138, and trades at a P/E of just 7x, like it’s attending a value investors’ fire sale.
ROCE stands at 6.49%, ROE at 3.72%, and debt is a manageable ₹84 crore (debt-to-equity: 0.32). The company hasn’t paid dividends since forever, proving that hoarding cash is also an art form. Yet, despite poor sales growth over five years (+7%), Nath has recently turned its fortunes — profit growth is up 1362% TTM. The paper may be absorbent, but these numbers are finally refusing to soak up red ink.
The question is: can a paper and acid maker really stay this profitable, or will the next quarter crumple faster than a soaked newspaper in monsoon?
2. Introduction
Nath Industries Ltd is what happens when a paper company meets a chemical plant and decides to raise a family. Born in 1980, the Aurangabad-based company is a veteran of India’s industrial landscape — old enough to have seen typewriters, dot-matrix printers, and fax paper (which, by the way, it still makes).
In a market dominated by big names like JK Paper and West Coast Paper Mills, Nath’s ₹119 crore market cap makes it the humble neighbourhood factory that refuses to die quietly. For decades, it’s been quietly cranking out core boards, kraft papers, tissues, sulphuric acid, oleums, and other sulphur-based chemicals — things essential to other industries but too boring for CNBC to mention.
The best part? Nath is in two cyclical industries at once — paper and chemicals. So, when one industry gets burnt, the other’s acid can literally burn back. FY25 saw the company juggling both divisions well, keeping operating margins steady around 6.5%, and even generating solar power on the side (because, why not?).
But let’s be honest — the real entertainment is in the numbers. Nath’s September 2025 quarter looks like it finally remembered how to print profits.
3. Business Model – WTF Do They Even Do?
Nath Industries basically runs three mini empires under one ticker:
Rama Paper Unit (Vapi, Gujarat): Makes absorbent kraft, MG poster, colored tissue, and OTC base paper — essentially everything that could either wrap a sandwich or become office stationery. Capacity: 21,600 TPA, now upgraded to 28,800 TPA.
Nath Paper Unit (Aurangabad): Specializes in core boards, coated papers, and thermal paper used for fax and ATM rolls. Capacity: 70,000 TPA. (Yes, fax machines still exist in 2025, mostly in government offices.)
Nath Chemical Division: The real wild card. Produces Sulphuric Acid, Oleum, SO₃, Chlorosulphonic Acid, and Linear Alkyl Benzene Sulphonic Acid — basically, everything your school lab told you not to touch. The plant has a capacity of 1.20 lakh tonnes per annum.
The company is currently investing ₹53.6 crore in capex, expanding acid capacity from 280 TPD to 500 TPD and installing new turbines and a 2 MW solar plant. Around ₹35 crore is SBI debt; ₹15 crore already drawn.
The paper division rides the “plastic ban” trend — their Mac D paper bags (yes, that’s the name) were launched under India’s anti-single-use plastic campaign.
So yes — Nath is turning trash into tissue, and acid into assets.
