Tamil Nadu Newsprint & Papers Ltd Q1 FY26 – ₹4,517 Cr Sales, -₹25 Cr PAT, P/E not meaningful, Trading at Half Book Value & Giving Dividend Like It’s Diwali Every Day
1. At a Glance
Ladies and gentlemen, welcome to the circus called TNPL, where the Tamil Nadu government holds ~35% stake, the company loses money, and still manages to declare dividends like your rich chacha at a shaadi. With a market cap of ₹1,035 Cr, current price ₹150, and book value ₹302, the stock is basically being sold at a 50% discount like a Big Bazaar clearance sale.
In the last 3 months, it has lost ~10% value, and in the last 1 year, it has shaved off ~30% — so yes, if you had invested last Diwali, your wealth would’ve turned into phooljhadi. ROE? Negative. ROCE? 5.5%. EPS? –₹3.7. But dividend yield? A bizarrely “healthy” 2%. Welcome to PSU logic: “Company ghata mein hai, par tumhe bonus jalebi milega.”
2. Introduction
Ah, TNPL — born in 1979, when governments thought running paper mills was as strategic as running airlines. Forty-five years later, they’re still at it, making paper, boards, cement (yes, cement), and generating power (but not enough to power their own profits).
The story is simple: imports from China, Indonesia, and Vietnam are dumping cheap paper, costs of bagasse and wood are yo-yoing like Adani stock on budget day, and operating margins have shrunk faster than my enthusiasm when GST invoices pile up.
Revenue declined 9.4% in FY24, another 8.4% in H1 FY25, sales realizations down 16.5%, and OPM slipped from 16.1% to 13.5%. Basically, TNPL’s topline is reading history books while its bottomline is writing obituaries.
But hey, they’re planning a ₹600–650 Cr capex for tissue plants and steam revamps. So maybe in a few years, the tissues produced will be handy for wiping investor tears.
3. Business Model – WTF Do They Even Do?
Imagine an all-in-one dosa corner that serves masala dosa, pizza dosa, chocolate dosa, and also sells agarbatti on the side. That’s TNPL.
Paper: High-quality writing and printing paper under brands like TNPL Copier and Copy Crown. (Because one copy is not enough, you need the crown too.)
Boards: Multi-layer coated and uncoated boards like Aura Fold Premium and Aura Celebration (the only thing you’ll celebrate is escaping from this stock alive).
Cement: They literally use waste from paper manufacturing to make cement. Talk about recycling shareholder confidence.
Power: 7,258 lakh units generated, but 8,279 lakh consumed. Translation? They eat more than they produce. Add a 35.5 MW wind farm for “green power,” mostly used to keep the balance sheet looking less red.
So in summary: they make paper, make boards, burn cash, and make investors cry. Business model decoded.
4. Financials Overview
Here’s the comedy show in numbers (Q1 FY26):
Source table
Metric
Latest Qtr (Jun 25)
YoY Qtr (Jun 24)
Prev Qtr (Mar 25)
YoY %
QoQ %
Revenue (₹ Cr)
1,142
1,117
1,337
+2.3%
-14.6%
EBITDA (₹ Cr)
101
148
103
-31.8%
-1.9%
PAT (₹ Cr)
-7.4
21.9
22.1
-134%
-133%
EPS (₹)
-1.07
3.17
3.20
-134%
-133%
Commentary: Revenue flat, EBITDA gasping, PAT vanished. EPS went from “respectable” to “P/E not meaningful.” Basically, a government-sponsored Netflix comedy special.
5. Valuation Discussion – Fair Value Range
Let’s be nerdy auditors for a second.
P/E Method: EPS = –₹3.7 (annualized). P/E not meaningful. So ignore.
EV/EBITDA Method: EV = ₹2,613 Cr, FY25 EBITDA ~₹382 Cr. EV/EBITDA ≈ 6.8×. Peer average ~10×. So fair EV/EBITDA range ≈ 5.5×–8× → Value range = ₹145–210/share.
DCF Method: Assume cash flows grow at 3%, discount 12%. After 10 years of Excel torture, range comes ₹130–180/share.
🎯 Fair Value Educational Range: ₹130 – 200/share. Disclaimer: This range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers, Drama
Imports Flooding Market: Cheap paper from China, Vietnam, Indonesia is crushing sales realization. Free trade, but investors pay the price.
Capex Deferred: ₹600–650 Cr capex planned for FY25–26 (tissue plant, power revamp). But Phase 2 expansion deferred — because why bother expanding losses?
Dividend Jalebi: Despite losses, company pays dividends like a politician distributing biryani packets before elections. FY24 payout ratio? 194%.
AGM Tamasha: At the 45th AGM (Sep 2025), shareholders approved six resolutions, auditors gave “unqualified report,” and dividend declared
