Shree Ajit Pulp and Paper Ltd Q2 FY26 – ₹172 Cr Quarterly Revenue, 323% Profit Jump, ₹273 Cr Debt & A Paper Mill Running on Wind, Debt and Sarcasm

1. At a Glance – The Paper That Suddenly Decided to Flex

Shree Ajit Pulp and Paper Ltd is that classic Gujarati paper mill which quietly supplied kraft paper to box-makers for decades and then suddenly woke up in FY25–26 saying, “Bas, ab growth dikhaate hain.” With a current market cap of about ₹214 crore and a stock price hovering around ₹241, the company has delivered a quarterly revenue of ₹172.50 crore and a PAT of ₹5.84 crore in the September 2025 quarter. That is a 323% YoY jump in quarterly profit, which sounds dramatic until you remember last year’s base was crying softly in a corner. The stock trades at a P/E of ~11.4, below industry averages, ROCE is a modest 7.43%, ROE is an even more humble 3.96%, and debt stands tall at ₹273 crore like an overconfident cousin at a wedding. Three-month returns are almost flat, six-month returns are ~22%, and five-year CAGR sits near 15%. In short, this is not a momentum darling; it is a capex-heavy paper manufacturer trying to convince the market that its new machines will eventually print more cash than invoices.

2. Introduction – Welcome to the World of Boxes, Debt & Hope

Shree Ajit Pulp and Paper Ltd was incorporated in 1995, back when kraft paper was not “boring packaging material” but a respectable industrial product. The company manufactures kraft paper—mainly testliner and multilayer testliner—used for corrugated boxes. And if you think corrugated boxes are boring, please remember that Amazon, Flipkart, FMCG companies, pharma firms, and fruit exporters literally survive on them. No box, no business.

Over the years, SAPPL has built its operations in Vapi, Gujarat, steadily expanding capacity, experimenting with GSM ranges, and running a recycling-heavy model using waste paper. FY23 was not kind in terms of volumes, with production and sales dropping around 8%, but the company responded in typical Indian manufacturing style: more capex, more debt, and a new unit. Unit-II at Valsad came online in July 2023, allowing entry into lighter GSM kraft paper (40–120 GSM) with high tensile strength.

The September 2025 quarter numbers suggest that something is finally moving. Revenues are up sharply, margins have improved to double digits, and profits have recovered meaningfully. But the balance sheet also tells another story—borrowings have ballooned, interest costs have climbed, and returns on equity are still unimpressive. So the question is simple: is this a paper tiger, or is the box finally worth opening?

3. Business Model – WTF Do They Even Do?

At its core, Shree Ajit Pulp and Paper