Pudumjee Paper Products Q3 FY26 – ₹204 Cr Quarterly Sales, 22% ROCE, Debt Almost Zero… Then Why Did the Stock Get Pulped?


1. At a Glance – Specialty Paper, Special Mood Swings

₹801 crore market cap. ₹84 stock price. Down ~40% in one year. ROCE at a solid 22.4%, ROE 16.7%, debt-to-equity of a saintly 0.02, and still the stock is behaving like it just heard bad gossip at a family wedding.

Latest quarter (Q3 FY26, Dec 2025):

  • Revenue: ₹204 crore
  • PAT: ₹20.7 crore
  • EPS: ₹2.18
  • OPM: 14%

This is not a broken business. This is a boring-but-profitable specialty paper company that the market dumped because growth slowed and paper prices sneezed. The kind of stock where fundamentals are fine, but sentiment is having a midlife crisis.

So what’s going on? Is this value, or just recycled disappointment?


2. Introduction – From Quiet Compounder to Ignored Middle Child

Pudumjee Paper Products is not your flashy FMCG darling or PSU dividend ATM. It sits quietly in the specialty paper corner, making greaseproof, glassine, pharma-grade and hygiene papers that you probably touched today without knowing.

Over the last decade:

  • Sales CAGR (5Y): ~6%
  • Profit CAGR (5Y): ~27%
  • Debt: Crushed
  • Capacity utilization: ~80%

Yet the stock is trading at 8.6× earnings, while the industry average PE is north of 18.

So the market’s message is clear:
“Nice margins bro, but where is the growth?”

Let’s see if that complaint is fair.


3. Business Model – WTF Do They Even Do?

Imagine a paper company that doesn’t depend on textbooks, newspapers, or

random government orders. Pudumjee lives in specialty niches:

  • Food-grade greaseproof paper (bakery, QSRs, FMCG)
  • Glassine & release papers (labels, tapes)
  • Pharma & medical paper (OLB, medical packaging)
  • Hygiene tissues (institutional, not Instagram influencers)

Almost everything is B2B, repeat orders, low glamour, decent margins.

Revenue mix FY23:

  • Paper: ~97%
  • Hygiene products: ~3%

No consumer branding drama, no ad spends, no celebrity endorsements. Just machines, pulp, and invoices.


4. Financials Overview – Numbers Don’t Lie, Markets Do

Quarterly Comparison (Figures in ₹ Crore)

MetricLatest Qtr (Dec 25)YoY Qtr (Dec 24)Prev Qtr (Sep 25)YoY %QoQ %
Revenue204194207+5.2%-1.4%
EBITDA282628+7.7%0%
PAT212017+5.8%+23.5%
EPS (₹)2.182.061.78+5.8%+22.5%

Annualised EPS (Q3 rule):
Average of Q1–Q3 EPS × 4 ≈ ₹9.7, which matches reported TTM EPS.

Translation:

  • No collapse
  • No explosion
  • Just… steady grinding

The market hates steady when it expects fireworks.


5. Valuation Discussion – Cheap or Chewing Gum Cheap?

Method 1: P/E

  • EPS: ~₹9.7
  • Conservative PE range: 9×–12×
  • Fair value range: ₹87 – ₹116

Method 2:

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