1. At a Glance – A 1938 Dinosaur Trading at 5.6 P/E
Let’s start with the headline: ₹219 Cr market cap, ₹140 stock price, P/E of 5.60, Price-to-Book of 0.31, and a Dividend Yield of 2.50%.
This is not a startup burning venture capital. This is a company incorporated in 1938 — older than independent India — and still running four paper machines in Saharanpur.
Latest quarterly numbers?
- Q3 FY26 Sales: ₹91.82 Cr
- Q3 FY26 PAT: ₹8.22 Cr
- EPS (Q3): ₹5.27
Annualised EPS (Q3 × 4): ₹21.08
At ₹140 CMP, that gives a forward P/E of roughly 6.64 (140 ÷ 21.08).
Return in last 3 months? -14.1%.
ROE? 5.91%.
ROCE? 7.76%.
Debt to equity? A microscopic 0.01.
And yes — promoters have pledged 47.2% of their holding.
Cheap? Yes.
Boring? Definitely.
Safe? Depends.
Interesting? Oh absolutely.
Ready to see whether this is undervalued paper or just recycled disappointment?
2. Introduction – A Mill That Survived British Rule, Demonetisation & Two Fires
Star Paper Mills Ltd is part of the Duncan Goenka Group. It manufactures industrial, packaging, and cultural papers. ISO certified. R&D recognised by the Ministry of Science & Technology.
Sounds respectable, right?
Now let’s add masala.
- Fire in Nov 2022 → ₹9 Cr loss
- Another fire in Dec 2023 → ₹2 Cr damage
- Promoter pledge: 47.2%
- Sales decline in FY24 vs FY23
- EBITDA compression in 9MFY25
This is not a hyper-growth story. This is a cyclical, commodity-linked, working capital-heavy paper business that occasionally catches literal fire.
But here’s the twist:
- Almost zero debt
- Strong interest coverage (50x as per screener ratios)
- Trading at 0.31x book
So the real question is:
Is the market pricing in permanent decline?
Or is this a boring cash-generating asset temporarily ignored?
Let’s break it down.
3. Business Model – WTF Do They Even Do?
They make paper.
But not notebook paper from your childhood crush’s love letters.
They make:
Cultural Papers
Used in:
- Printing
- Diaries
- Security paper
- Envelopes
- Greeting cards
Industrial Papers
Used in:
- Carry bags
- Paper cups
- Bidi wrappers
- Soap packaging
- Tobacco packing
- Lamination
Installed capacity: 75,000 MTPA
Writing & Printing volume: ~28,052 MT
Packaging segment: ~36,226 MT
So basically, if something in India needs to be wrapped, printed, laminated or packaged — they might be involved.
They are integrated: pulp to paper.
They even operate turbines (5 MW & 6 MW) — meaning some level of energy self-reliance.
But here’s the catch:
Paper is:
- Commodity driven
- Raw material volatile
- Highly competitive
- Margin sensitive
This is not a moat business. This is a grind business.
Would you rather own a tech SaaS company or a Saharanpur pulp
