At a Glance
Pudumjee Paper Products Ltd pulled a rabbit out of its tissue box this quarter: PAT surged 30% to ₹40 crore, even as revenue slipped 3% YoY to ₹219 crore. The stock, loving the profit-party, spiked 5% to ₹125. With ROCE at a solid 24% and debt nearly wiped clean, the company is wiping its slate squeaky clean. However, growth in sales remains as wrinkled as yesterday’s newspaper.
Introduction
Imagine a company that turns pulp into gold – or at least, solid profits. That’s Pudumjee Paper for you. Specializing in everything from greaseproof food papers to Bible-thin printing grades, it’s the silent player behind every burger wrap and tissue box you’ve used.
But hold the applause – while profits are flexing, sales are stuck in slow motion. Investors love the low-debt balance sheet and rising margins, but the lack of topline growth is the smudge on an otherwise clean sheet.
Business Model (WTF Do They Even Do?)
Pudumjee Paper manufactures specialty papers for food packaging, pharma, household tissues, décor papers, and more. Its niche? High-value, low-volume papers with custom applications. The company also converts hygiene tissue products, feeding FMCG brands.
Revenue Mix:
- Specialty Papers (Glassine, Greaseproof): Main revenue driver.
- Tissues & FMCG: Growing but small.
- Security & Pharma Paper: Stable demand but low scale.
Their ISO and FSC certifications allow them to tap export markets too. The moat? Customization and client stickiness. The drag? Slow sales growth and a market that treats paper like yesterday’s news.
Financials Overview
Q1 FY26:
- Revenue: ₹219.5 Cr (↓3% YoY)
- EBITDA: ₹34 Cr (↑42% YoY), OPM 17% (vs 13% LY)
- PAT: ₹39.6 Cr (↑30% YoY)
- EPS: ₹3.82
FY25 Snapshot:
- Revenue: ₹809 Cr (↑3% YoY)
- PAT: ₹104 Cr (↑6% YoY)
- Margins: OPM ~15%, PAT ~13%.
Commentary: Costs down, profits up – management deserves a tissue for their tears of joy. But sustained growth needs revenue to join the party.
Valuation
Current Price ₹125. P/E 12.4. Book Value ₹61 → P/B 2.0. Cheap? Kinda.
Fair Value Range
- P/E Method:
Industry average P/E ~15. Using 14× FY26E EPS (₹14):
→ Fair Price ≈ ₹196 - EV/EBITDA Method:
FY25 EBITDA ₹121 Cr, assume EV/EBITDA 8× → EV ≈ ₹968 Cr → Price ≈ ₹165 - DCF (Quick & Dirty):
Assume 8% growth, 11% WACC, terminal 3% → FV ≈ ₹170
Fair Value Range: ₹165 – ₹195
(Current price ₹125 suggests 30–50% upside if growth sustains.)
What’s Cooking – News, Triggers, Drama
- Solar Project: Capex for renewable energy to cut costs.
- Expansion Plans: New capacity aimed at high-margin specialty grades.
- Debt-Free Status: Company is now virtually debt-free.
- Risk: Sales stagnation, raw material prices, and global paper oversupply.
Balance Sheet
| Particulars (₹ Cr) | Mar 23 | Mar 24 | Mar 25 |
|---|---|---|---|
| Assets | 626 | 715 | 763 |
| Liabilities | 239 | 222 | 180 |
| Net Worth | 397 | 493 | 583 |
| Borrowings | 57 | 22 | 12 |
Auditor Remark: Debt is nearly extinct – CFOs dream, banks’ nightmare.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating CF | 31 | 133 | 82 |
| Investing CF | 4 | -95 | -35 |
| Financing CF | -31 | -43 | -17 |
Remark: Healthy operating cash. Investments eating up liquidity – but hey, that’s growth spending.
Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 18% | 17% | 17.8% |
| ROCE | 19% | 27% | 23.8% |
| P/E | 15 | 13 | 12.4 |
| PAT Margin | 12% | 13% | 13% |
| D/E | 0.14 | 0.05 | 0.02 |
Comment: Ratios looking as neat as a fresh A4 sheet.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 759 | 785 | 809 |
| EBITDA | 87 | 136 | 124 |
| PAT | 59 | 98 | 104 |
Remark: Revenue flat, profits rising – margin game is on point.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| JK Paper | 6,679 | 351 | 17 |
| West Coast | 4,062 | 311 | 11 |
| Seshasayee | 1,718 | 88 | 19 |
| Pudumjee Paper | 809 | 104 | 12 |
Remark: Pudumjee is smaller but far more profitable per rupee of sales.
Miscellaneous – Shareholding, Promoters
- Promoters: 71.6% – steady.
- FIIs: 1.1% – foreigners nibbling.
- DIIs: 0% – domestic funds missing.
- Public: 27.3% – retail still holding tissues.
Promoter Bio: The Wadia group lineage – paper veterans with a knack for turning pulp into profits.
EduInvesting Verdict™
Pudumjee Paper is printing money even when sales yawn. Strong margins, near debt-free status, and a solar-powered cost advantage make it a rare gem in the paper sector. The only smudge? Revenue growth is crawling.
SWOT
- Strengths: Debt-free, high ROCE, specialty niche.
- Weaknesses: Flat topline, high working capital days.
- Opportunities: Solar project, export growth, tissue segment boom.
- Threats: Raw material costs, import competition, demand shocks.
Conclusion:
Pudumjee Paper is quietly building value – like a tissue box you don’t notice until you need it. For investors, it’s an underdog with potential, provided it can finally make its sales graph less boring.
Written by EduInvesting Team | 01 August 2025
SEO Tags: Pudumjee Paper Products, Specialty Paper, Q1 FY26 Results, Paper Sector Analysis
