1. At a Glance – The Paper That Cuts You Back
Tamil Nadu Newsprint & Papers Ltd is that awkward PSU-style company stuck in a brutally capitalist paper industry. On one side, it has scale, integration, captive pulp, power, windmills, and a state government parent watching every move. On the other, it’s fighting cheap Asian imports, volatile coal prices, declining realizations, and margins thinner than the paper it sells.
As of late January 2026, TNPL sits at a market cap of ~₹940 crore, trading around ₹136, down ~14% in three months and ~20% in one year. The stock trades at 0.45× book value, which screams “cheap” until you notice ROCE at 5.54%, interest coverage at 1.22, and debt north of ₹1,871 crore.
Q3 FY26 numbers showed ₹1,121 crore revenue and ₹6.77 crore PAT. Yes, profits more than doubled YoY—but that’s because last year’s base was already face-planting on the floor. This is not a turnaround story yet. This is a survival story with windmills, bagasse, and a tissue plant dream.
So is TNPL a deep value paper play… or a value trap printed on recycled hope? Let’s unroll the reel.
2. Introduction – Welcome to the Cyclical Thunderdome
Paper is one of those businesses where everything looks fine until it suddenly doesn’t. Prices fall. Imports surge. Coal spikes. Margins evaporate. And then management says “temporary headwinds” for the eighth quarter in a row.
TNPL has been around since 1979 and was once the poster child for eco-friendly bagasse-based paper in India. It still runs one of the largest single-location paper plants in the country, with strong backward integration into pulp and power.
But FY24 and FY25 reminded everyone that scale doesn’t protect you from global dumping. Imports from China, Vietnam, and Indonesia crushed realizations. FY24 revenue fell 9.4% YoY, H1 FY25 fell another 8.4%, and operating margins slid from healthy teens to low double digits.
Despite this, TNPL kept paying dividends (sometimes aggressively), added debt, deferred expansion, and quietly started building a tissue plant—because nothing says confidence like entering another competitive segment during a downcycle.
The question is simple: is TNPL setting itself up for the next upcycle, or just digging a deeper balance-sheet hole?
3. Business Model – WTF Do They Even Do?
TNPL is not just a paper company. It’s a paper + board + pulp + power + wind + cement + notebook cocktail that only PSU engineers could design.
Core Segments
- Printing & Writing Paper (PWP)
Surface-sized and non-surface-sized papers for textbooks, notebooks, stationery, and commercial printing. - Packaging Boards
Coated and uncoated multi-layer boards for FMCG, food, pharma, and e-commerce packaging. - Cement (small)
Uses fly ash and lime sludge—basically recycling waste into revenue. - Power Generation
Captive thermal, cogeneration, and 35.5 MW of wind power.
Why This Matters
This integration reduces input risk in theory. In practice, coal prices still punch margins, bagasse availability fluctuates, and imported paper ignores your cost structure completely.
TNPL sells primarily through dealers (58%), with government sales at 14%, direct customers 16%, and exports ~12–13%. Domestic demand dominates—but imports dominate pricing.
Lazy investor question: does integration guarantee profits?
Short answer: no. It only guarantees complexity.
4. Financials Overview – Numbers
