1. At a Glance – Paan Economy’s Silent Supplier
The Indian Wood Products Company Ltd sits at a market cap of ₹216 Cr, trading at ₹33.8 per share, with a P/E of 41 and a price-to-book of just 0.61x. Sounds cheap? Wait till you see the returns.
Latest Q3 FY26 (December 2025) numbers:
- Sales: ₹53.32 Cr
- PAT: ₹1.00 Cr
- EPS: ₹0.16
- ROCE: 3.32%
- ROE: 1.46%
Stock return over 3 months? -13.7%
One-year return? -25.9%
So here we are: a century-old manufacturer of katha and catechin, supplier to brands behind Rajnigandha, Vimal, and Dilbag, trading at a premium multiple… while earning returns lower than your fixed deposit.
Is this hidden value? Or just value trap with paan flavouring? Let’s unwrap the red-stained truth.
2. Introduction – A 1919 Vintage Story
Incorporated in 1919.
Yes, when people were still using telegrams and India was under British rule, this company was already boiling Acacia catechu wood to make katha.
Over 100 years later, it is still doing the same thing.
No AI pivot.
No EV dreams.
No “blockchain-enabled catechin extraction”.
Just katha.
Revenue mix (FY23):
- Katha – 93%
- Cutch – 3%
- Spices – 3%
- Other – 1%
This is a mono-product business. If paan demand slows, the company’s mood also slows.
It exports 17% of revenue, rest domestic. It supplies to major pan masala companies indirectly.
Now here’s the funny part — stock trades at 41x earnings.
For a company growing sales at 3% CAGR over 5 years.
Why?
Is market pricing in a paan supercycle? Or are we just collectively chewing valuation without thinking?
Let’s dig deeper.
3. Business Model – WTF Do They Even Do?
Simple.
They cut wood.
Boil it.
Extract katha and cutch.
Sell to paan masala manufacturers.
And also sell packed spices.
Segment 1: Manufacturing of Katha
Used in paan preparation. Also claims medicinal benefits in Ayurveda.
Production capacity:
- ~4,000 MTPA katha
- ~1,350 MTPA cutch
- Additional 300 MTPA from Jammu unit
Plants:
- Contract manufacturing in Daman
