1. At a Glance – When Paper Burns, Investors Feel the Heat
₹114 crore market cap. ₹60.3 stock price. 0.44x book value. ROE at a modest 3.72%. And then boom — Q3 FY26 PAT collapses 88.8% YoY to just ₹0.56 crore while revenue inches up 2.04% YoY to ₹116.77 crore.
Welcome to Nath Industries Ltd — where sulphur fumes meet tissue paper margins.
The company operates in industrial & specialty papers and sulphur-based chemicals. On paper (pun intended), it looks diversified. In numbers? It looks like a roller coaster designed by an accountant.
The stock is down ~19.6% in the last 3 months and ~24.2% over 1 year. Yet it trades at just 9.15x earnings and 0.23x sales. Sounds cheap? Maybe. Or maybe the market knows something about paper margins that retail investors don’t.
Quarterly EPS stands at ₹0.29 in Q3 FY26. Annualised (Q3 method: average of Q1, Q2, Q3 × 4), we’ll calculate properly in the financial section.
Before jumping to conclusions, ask yourself:
Is this a turnaround chemical-paper hybrid… or a low-margin cyclical stuck in a price war?
Let’s investigate.
2. Introduction – The Curious Case of Paper & Acid
Incorporated in 1980, Nath Industries Ltd manufactures industrial paper and sulphur-based chemicals. Sounds simple. But this is India — nothing is simple.
The company runs:
- Paper manufacturing units at Vapi and Aurangabad
- A chemical plant producing sulphuric acid and related derivatives
- Export operations across Europe, South America, and Southeast Asia
FY23 revenue mix:
- Papers ~76%
- Chemicals ~24%
- Exports ~15%
So roughly three-fourths paper, one-fourth chemical.
Now here’s where it gets spicy.
In the recent Q3 FY26 announcement, management mentioned that fires affected the paper divisions. Yes, actual fire. Not metaphorical “burning cash.” Physical fire.
And that explains why Q3 margins melted faster than butter on a Gujarat highway.
But here’s the bigger question:
If 76% of revenue comes from paper, and paper gets disrupted — how resilient is the business?
Are chemicals the silent stabilizer here? Or just a side dish?
Keep reading.
3. Business Model – WTF Do They Even Do?
Let’s decode it like we’re explaining to your cousin who just opened a demat account yesterday.
1. Paper Division
Two major units:
Rama Paper (Vapi)
Makes absorbent kraft, MG poster, white tissue, colored tissue, OTC base paper.
Capacity:
- Writing & printing + absorbent paper: 21,600 TPA (enhanced to 28,800 TPA)
- Specialty paper: 8,000 TPA
Nath Paper (Aurangabad)
- Core boards
- Thermal paper for ATMs and fax machines
- Capacity: 70,000 TPA
FY23 production:
- Core Board: 28,957 MT
- Thermal Paper: 2,943 MT
2. Chemical Division
Sulphur-based industrial chemicals:
- Sulphuric Acid
- Oleum
- Sulphur Trioxide
- Thionyl Chloride
- LABSA
Capacity:
- 1.20 lakh tons per annum
- Sulphuric acid capacity expanding from 280 TPD to 500 TPD
So essentially:
Paper for packaging + industrial chemicals for heavy industries.
Not glamorous. Not Instagrammable. But essential.
Also launched kraft paper for square bottom bags under the “Ban Single Use Plastic” movement. That’s strategic positioning.
And installed 1 MW solar power generating 1.90 million kWh in FY23.
This is not a tech startup. This is industrial India sweating in boilers.
Now the question:
Is this business scalable? Or permanently stuck in 5–7% margins?
4. Financials Overview – Numbers Don’t Lie (But They Do Sigh)
Q1 FY26 EPS = ₹1.99
Q2 FY26 EPS = ₹2.32
Q3 FY26 EPS = ₹0.29
Average = (1.99 + 2.32 + 0.29) / 3 = ₹1.53
Annualised EPS = 1.53 × 4
