Nahar Poly Films FY26: ₹704 Cr Revenue, 7.66x P/E, and a ₹594 Cr Capex Bet on the Future

General information and entertainment, not investment advice. The author is not a SEBI-registered adviser or research analyst. No recommendation, no promised returns. Markets carry risk including loss of capital. Figures may not be current. Consult a registered adviser before acting. Prices referenced are not live — the reference price used throughout this article is ₹245.65.

1 — At a Glance

Revenue crossed ₹704 Cr in FY26, a five-year compounded growth of 18% off a much smaller base. The operating profit margin recovered to 15% from a near-catastrophic 4% in FY24, a year the BOPP industry would rather forget.

PAT came in at ₹78.84 Cr — the best since FY22’s ₹97.71 Cr. EPS on a fully consolidated basis: ₹32.05. The market, at the reference price of ₹245.65, pays 7.66x those earnings.

The balance sheet carries ₹78.95 Cr in borrowings against total equity of ₹866.78 Cr — a D/E of 0.09. That’s almost nothing. Which makes the announcement of a ₹594 Cr expansion capex (funded mostly via a ₹418 Cr term loan) the most interesting number in the room.

The company’s ROCE sits at 10.7%. The question the market has not yet fully answered: does a business earning 10.7% on capital deserve to borrow ten times its current debt and double capacity in an industry that has already been through one oversupply crisis in the past three years?

2 — Introduction

Nahar Poly Films Limited (NPFL) was not always in the film business. It started life as Nahar Exports Ltd, pivoted through a textile-to-investment demerger in 2006, changed its name in 2008, and commissioned its first BOPP plant in Madhya Pradesh in 2010. The second line came in February 2022, doubling installed capacity to 60,000 TPA.

The company sits inside the sprawling Nahar Group — a seven-decade-old Ludhiana conglomerate with fingers in textiles (Oswal Woollen Mills, Monte Carlo Fashions), BOPP films, real estate, sugar, and financial services. NPFL’s largest promoter shareholder is Nahar Capital and Financial Services Limited (NCFSL), which holds 49.16% of NPFL — and NPFL, in turn, holds 39.48% of NCFSL. A holding-company loop that the consolidated accounts dutifully account for via equity method.

FY24 was the industry’s purgatory. The market leader cut prices aggressively to hold market share; realizations cratered across the sector; NPFL posted PAT of just ₹5.68 Cr on ₹599.93 Cr of revenue — an NPM so thin it would lose a fight with a rounding error. FY25 began the recovery. FY26 made it stick: revenue ₹704.2 Cr, PAT ₹78.84 Cr, OPM 15%.

Q4 FY26 (Mar 2026) added ₹167.68 Cr in revenue and ₹20.5 Cr in net profit, capping a year where all four quarters turned profitable for the first time since FY23. The board recommended a ₹1.50 per share dividend (30% on face value of ₹5), and simultaneously announced that Ms. Sakshi Maheshwari — 23, freshly minted ACS — has taken over as Company Secretary following Priya’s departure in March 2026.

3 — Business Model: WTF Do They Even Do?

NPFL manufactures Biaxially Oriented Polypropylene (BOPP) films. Which sounds like a lab experiment but is actually what wraps your biscuit packet, your bread loaf, your cigarette box, your tape roll, and the textile bags your grandmother stores winter quilts in.

BOPP film is polypropylene resin stretched in two directions simultaneously — bi-axially — until it becomes a thin, strong, optically clear film. The company then sells this in several grades:

Plain/transparent films — used in lamination and packaging. The commodity end of the range. Margins are slim because any BOPP plant can make this.

Metalized films — a thin aluminium layer deposited on the BOPP base. Better barrier properties, shinier appearance, better margins, more differentiation. This is where NPFL has more room to breathe.

Specialty grades — white opaque, sealable, pearlised, tape grade. Each grade has different specifications and customer stickiness. Top-10 customers in FY25 contributed ~35% of revenue (down from ~57% in FY24 — a meaningful improvement in customer diversification).

The raw material is polypropylene resin (and additives), which accounts for roughly 70% of operating income. Polypropylene is a petrochemical derivative — it moves with crude oil. The company does not make crude oil. This is a permanent structural vulnerability, partially softened by forward contracts.

Capacity: 60,000 TPA at Distt. Raisen, Madhya Pradesh (Village Sarakia/Itayakalan). Exports go to Nigeria, the UK, Bangladesh, UAE, Turkey, Oman, Tanzania, Nepal, and the Slovak Republic — about 12% of FY25 revenue. Domestic sales cover 200+ customers.

The business model’s honest description: a commodity-adjacent film manufacturer with modest differentiation, raw material pass-through economics, and a balance sheet that is very clean except for the giant capex about to arrive. The moat, such as it is, comes from scale, customer relationships, and the group’s financial umbrella — not from any proprietary technology.

4 — Financials Overview

Figures are consolidated, in ₹ crore.

Quarterly Results — Q4 FY26 (Mar 2026)

Q4 OPM came in at 19% — the strongest quarter in the series shown on screener. Operating profit grew faster than revenue in Q4, suggesting operating leverage began to show up as fixed costs stayed flat while volumes held.

The full-year FY26 EPS of ₹32.05 (consolidated, Net Profit ÷ 2.46 Cr shares) is the reference for all P/E calculations in this article.

Source — Announcements: The board on 28 May 2026 approved audited FY26 results and recommended a ₹1.50/share dividend (30% on ₹5 face value). Sakshi Maheshwari was appointed Company Secretary effective the same date.

Source — CARE Ratings (April 2026): CARE reaffirmed CARE A; Stable on long-term facilities (enhanced to ₹545 Cr) and CARE A1 on short-term. The reaffirmation specifically cited the group’s financial flexibility and NPFL’s “strong liquidity profile,” noting investments of ₹101.18 Cr in mutual funds, debentures, and AIFs as of December 31, 2025. Working capital utilization ran at only ~8% on a trailing-12-month basis through February 2026. The agency flagged the ₹594 Cr expansion as a project implementation risk and noted that PBILDT margins are expected to moderate in FY27 due to geopolitical disruptions (Middle East conflict, Strait of Hormuz closure) raising raw material costs.

5 — Market Expectations & Historical Multiples

This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.

The market currently pays 7.66x earnings here, against its own five-year average of 12.9x and a peer median of 20.65x.

Price-to-book sits at 0.70x against a peer median of 1.88x — the market is assigning less than replacement value to the equity.

ROE of 9.45% is the best single-year figure in five years (5-year average: 6.72%), yet the multiple has remained well below both historical and peer norms during this recovery.

The market appears to be pricing in one or more of the following: the cyclical and uncertain nature of BOPP margins (FY24’s near-zero profitability being a recent data point), the execution risk attached to the ₹594 Cr capex and its ₹418 Cr term loan component, and the structural susceptibility of margins to polypropylene resin price volatility — a concern CARE Ratings explicitly flagged in its April 2026 report. The geopolitical disruption in the Middle East, which has tightened raw material supply and raised input costs, is also a near-term factor the market is incorporating.

6 — What’s Cooking

₹594 Cr capacity expansion — approved July 2025, the company is adding 36,000 MTPA of BOPP capacity, taking total installed capacity from 60,000 to 96,000 TPA. Funding split: ₹418 Cr term loan, balance from internal accruals. Commercial Operation Date (COD) targeted by March/April 2028. Repayments in 32 equal quarterly instalments beginning Q1 FY29. The term loan facility has been financially closed.

CARE rating enhancement — long-term bank facilities enhanced from ₹160.16 Cr to ₹545 Cr in April 2026, reflecting the new capex financing. CARE A; Stable maintained, meaning no credit deterioration in the agency’s view despite the leverage increase.

Company Secretary churn — Priya resigned effective March 27, 2026; Sakshi Maheshwari appointed on the same date and formally confirmed by the board on May 28, 2026. Two CS transitions in a single announcement is unusual enough to note.

Dividend of ₹1.50/share — 30% on face value of ₹5, subject to AGM approval. The payout ratio on consolidated EPS of ₹32.05 is approximately 4.7% — conservative relative to historic payout years.

Raw material cost improvement in 9MFY26 — BOPP resin costs declined approximately 7% YoY to ₹89,063/MT in 9MFY26 from ₹95,779/MT, per CARE data. This drove margin recovery. The Iran-Israel conflict and Strait of Hormuz disruptions are expected to reverse some of this in FY27.

Export diversification — 12 export markets including Nigeria, UK, UAE, Turkey, and Nepal. Export share held at ~12% of FY25 revenue. Geography-specific regulatory changes remain a flagged risk.

7 — Balance Sheet

Figures consolidated, in ₹ crore.

Assets balance liabilities across all three years. ✓

Three observations on the numbers:

• Borrowings fell from ₹125.85 Cr to ₹78.95 Cr in two years while the company simultaneously approved a ₹418 Cr term loan. The balance sheet is getting cleaned up just in time for a serious mess to arrive.
• Investments (largely group holdings) are ₹611.43 Cr against total borrowings of ₹78.95 Cr. The company technically holds more in investments than it owes — a structure that makes the standalone financials look very different from the consolidated ones.
• Cash & Bank in the Excel data sheet: ₹0.73 Cr as of Mar 2026. The actual liquidity is in the investment pool (CARE cites ₹101.18 Cr in liquid investments as of Dec 2025), not the cash line.

There is a quiet discipline in a company that spent two years reducing debt before announcing the biggest capex in its history. Whether that discipline holds post-COD will be the defining question of the next three years.

Does ₹0.73 Cr cash and ₹78.95 Cr debt seem inconsistent with CARE’s “strong liquidity” assessment? The answer lies in ₹611 Cr of investments — most of which are group entities and quoted instruments, not all of which are liquid on demand.

8 — Cash Flow: Sab Number Game Hai

Operating cash flow recovered sharply from FY24’s ₹16.69 Cr to ₹56.65 Cr in FY25 and held near that level in FY26 at ₹50.28 Cr, even as net profit grew substantially. The divergence between PAT (₹78.84 Cr) and CFO (₹50.28 Cr) in FY26 is partly explained by working capital build — inventory rose from ₹50.24 Cr to ₹70.12 Cr.

Financing outflows have been consistently negative (₹38-40 Cr range), reflecting debt repayment and modest dividends. This will reverse materially once the ₹418 Cr term loan is drawn down for the expansion.

Investing outflows jumped to ₹24.68 Cr in FY26 as capex preparatory work began — modest relative to what is coming.

A business that generates ₹50-57 Cr in operating cash flow per year is about to fund a project that costs ₹594 Cr. The math works only if debt is drawn as planned and the project delivers on schedule. Capex stories are only as good as their execution chapters.

9 — Ratios: Sexy or Stressy?

ROE 9.45% — the equity is earning below its long-run cost for most professional investors, though this is the highest single-year figure in five years. The 5-year average of 6.72% puts the recent recovery in context.

ROCE 10.7% — capital employed is generating a modest return. The ₹594 Cr capex will double the capital employed; maintaining or improving this ratio post-commissioning requires the new capacity to run at healthy utilization from the start.

P/E 7.66x — the market is paying less than 8x on current-year earnings, a multiple that reflects the cyclical risk embedded in this business rather than a verdict on current-year performance.

PAT Margin 11.2% — a meaningful recovery from FY24’s sub-1% margin. Raw material softness in 9MFY26 contributed; FY27 margin trajectory depends on how quickly Middle East supply disruptions resolve.

D/E 0.09x — near-zero gearing. The metric will change substantially as the term loan is drawn down through FY27-28.

10 — P&L Breakdown: Show Me the Money

(EBITDA = PBT + Interest + Depreciation)

The revenue story over three years is steady and unexciting: +11% in FY25, +6% in FY26. Nothing to write home about on the top line. The profit story is different: PAT went from ₹5.68 Cr to ₹78.84 Cr in two years — a 13x recovery that came entirely from margin restoration, not volume growth.

FY24 was the anomaly. Industry oversupply triggered aggressive price cuts; NPFL’s EBITDA collapsed to ₹32.02 Cr on ₹600 Cr of revenue — a 5.3% EBITDA margin. A polypropylene resin business running at 5% EBITDA margin is essentially donating its employees’ efforts to the raw material supplier.

FY25 and FY26 represent normalization. EBITDA margins of 14% and 18.6% respectively are closer to the company’s historical operating range. The 10-year compounded profit growth of 18% (screener data) reflects a business that can earn well in good years — the challenge is the amplitude of the bad ones.

Depreciation has been flat at ₹32.47-32.50 Cr for three years, reflecting a fully commissioned plant with no major additions. Once the new line is operational, this line item will step up meaningfully.

11 — Peer Comparison

Nahar sits at the smaller end of the named peer set by revenue — smaller than Uflex (₹15,401 Cr), Polyplex (₹7,086 Cr), and EPL (₹4,763 Cr). Its PAT of ₹78.84 Cr is comparable to TCPL Packaging’s ₹107 Cr on roughly 40% of TCPL’s revenue — a higher margin profile than the raw comparison suggests.

The market pays 7.66x for Nahar against 9.09x for Uflex (₹15,401 Cr revenue, comparable BOPP exposure) and 22.34x for TCPL (different product mix — folding cartons and multilayer packaging). XPRO at 145x is in a different galaxy, apparently being priced for something other than its current ₹19 Cr PAT. Polyplex at 62.79x on ₹45 Cr PAT is similarly stretched on current earnings.

Jindal Poly Film, the largest domestic BOPP player by revenue, posted a PAT loss of ₹134 Cr — a data point that clarifies why the entire sector trades at cautious multiples. When the market leader loses money in a downcycle, the floor for smaller players looks uncertain regardless of their own results.

12 — Miscellaneous: Shareholding & Promoters

Promoters — the Oswal family of Ludhiana, patriarch being the late Mr. Vidya Sagar Oswal, now represented by Mr. J.L. Oswal (Chairman, 50+ years industry experience) and his sons Kamal Oswal and Dinesh Oswal. Dinesh Oswal is MD of Nahar Spinning Mills Limited and Nahar Capital and Financial Services Limited. NCFSL holds 49.16% of NPFL; NSML holds 18.92%. The cross-holding between NPFL and NCFSL (NPFL owns 39.48% of NCFSL) is a notable structural feature — the consolidated accounts include NCFSL’s share of profit via the equity method.

Promoter holding has crept up from 70.85% (Jun 2023) to 72.51% (Mar 2026) — a steady, unhurried accumulation at the group level. No pledge. Zero. In a market where pledged promoter holdings are a routine governance concern, this is notable.

A mild roast, since it is invited: the Nahar Group’s web of holding companies — Nahar Capital, Nahar Spinning, Nahar Industrial Enterprises, Sankheshwar Holding, Closettrunk Private Limited (a new arrival in the Mar 2026 register with 0.25%) — creates a shareholding tree that would give a first-year CA student a headache. The cross-holdings between NPFL and NCFSL mean that a portion of NPFL’s “investments” are, in spirit, NPFL investing in a company that invests in NPFL. The group enjoys this structure. Minority shareholders learn to accept it.

13 — Corporate Governance: Angels or Devils?

Auditors — YAPL & Co, Chartered Accountants, Ludhiana (Firm Regn. 017800N). Statutory audit for both standalone and consolidated FY26. Unmodified opinion on both. Auditors are independent for the period under review. YAPL & Co is a Ludhiana-based firm — not one of the large national firms, which is common for mid-cap Ludhiana industrials.

Board — Mr. J.L. Oswal (Chairman), Kamal Oswal, Dinesh Oswal, Sambhav Oswal (Managing Director, DIN 07619112, signatory on the FY26 results filing). The board approved FY26 results on 28 May 2026.

Pledges — 0.00%. All years. Clean.

Related party transactions — NPFL has investments in group entities (₹168.73 Cr in group entities per CARE’s Dec 2025 data), cross-holding with NCFSL, and historical inter-group financial support. CARE explicitly noted that “in the past, it has been observed that the promoters and promoter group companies have extended need-based financial support to other group companies” — a statement that cuts both ways.

Tax demand, litigation — nothing flagged in the available filings.

Company Secretary churn — Priya’s departure in March 2026, quickly followed by Sakshi Maheshwari’s appointment (23 years old, ACS, B.Com Punjab University) is a minor governance note. CS changes are common; the timing — a month before the full-year results — is worth monitoring for context in future filings.

CARE rating sensitivities — positive trigger: revenue above ₹850 Cr with PBILDT margin above 18% and ROCE beyond 21%. Negative trigger: capacity utilization below 75%, or gearing above 0.50x. The current trajectory clears neither positive threshold yet, and the gearing will temporarily breach 0.50x once the term loan is fully drawn.

14 — Industry Roast & Macro Context

The BOPP film industry has the energy of a freshman orientation where everyone shows up at once. Margins improve; everyone builds capacity; margins collapse; half the sector regrets it; the cycle resets. The FY24 episode — where the market leader reportedly cut prices to protect market share while smaller players watched their margins evaporate — is merely the most recent chapter in this tradition.

Polypropylene resin, the key input, is effectively priced by whoever controls the supply of propylene gas, which is in turn decided by crackers running off crude oil. The BOPP manufacturer sits downstream of all of this, able to absorb margin pain when oil spikes but unable to do much about it except hedge forward contracts and hope.

On the demand side, flexible packaging consumption in India is structurally growing — organised retail, food processing, FMCG penetration, and pharma packaging all pull in the same direction. The macro tailwind is real and persistent. The problem is that every BOPP player in India (and several in China and Southeast Asia) is also aware of this tailwind, and their response is uniformly to add capacity.

The Strait of Hormuz disruption in 2025-26 has added a short-term twist: raw material costs are up, some key suppliers have invoked force majeure, and demand is stagnant. CARE expects this to pressure FY27 PBILDT margins before conditions normalize. The industry’s structural demand story remains intact; the timing of the next supply-side discipline phase is, as always, unknown.

Geography-specific export risks are real — Nigeria’s currency volatility, Turkey’s macro instability, and the broad Middle East situation are not theoretical concerns for a company that exports to these markets.

15 — EduInvesting Verdict

SWOT Summary

A business with a near-clean balance sheet, a recovering margin profile, and a credit rating that has only improved — now committing to the largest capital deployment in its history, in an industry with a documented tendency to oversupply itself into margin destruction.

The numbers tell one story; the capex announcement opens a different chapter entirely.