1. At a Glance
Voith Paper Fabrics India Ltd (VPFV) makes the invisible backbone of your favorite stationery — paper machine clothing. Zero debt, German DNA, and margins tighter than your new jeans. But is this quiet compounder finally ready for a front-page headline?
2. Introduction with Hook
Imagine you’re at a fancy hotel, handed a thick, luxurious paper menu. You marvel at it. But did you ever wonder what machines make paper so flawlessly smooth? Well, someone had to dress those paper machines, and that someone is Voith Paper Fabrics India Ltd — the silent tailor behind the scenes.
- Market Cap: ₹853 Cr
- FY25 PAT: ₹36 Cr (Flat YoY)
- CMP: ₹1,944 (Off ~40% from its 52-week high of ₹3,099)
This company is so low-key, its felt machines are louder than its stock chatter.
3. Business Model (WTF Do They Even Do?)
VPFV manufactures paper machine clothing (PMC) – think of them as high-tech conveyor belts made of textile, vital in paper manufacturing.
Their products include:
- Forming fabrics
- Press felts
- Dryer screens
- Fibre-cement sheet felts
- Hi-tech processing felts
Basically, they sell to paper mills. Every time you wipe, write, or wrap – there’s a silent VPFV product behind it.
Ownership:
Wholly owned by Voith Group (Germany) via VP Auslandsbeteiligungen GmbH (74.04%).
Certifications include:
- ISO 9001:2015
- ISO 14001:2015
- OHSAS 45001:2018
Not a glamour stock. But one of the few in India making the entire range of PMC.
4. Financials Overview
| Year | Revenue (₹ Cr) | EBITDA (₹ Cr) | EBITDA % | PAT (₹ Cr) | OPM % | EPS (₹) |
|---|---|---|---|---|---|---|
| FY21 | 119 | 36 | 30% | 27 | 30% | 61.63 |
| FY22 | 145 | 39 | 27% | 29 | 27% | 66.73 |
| FY23 | 164 | 41 | 25% | 32 | 25% | 72.3 |
| FY24 | 180 | 45 | 25% | 36 | 25% | 82.62 |
| FY25 | 190 | 51 | 27% | 36 | 27% | 81.66 |
Sales CAGR (5Y): ~10%
PAT CAGR (5Y): ~7%
No debt. Yes, zero.
Inventory Days: 220 (high, but typical for industrials)
5. Valuation
- Current PE: ~23.8x
- Industry PE: 27-30x (Garware, Vardhman, etc.)
Valuation feels rich until you consider:
- German parent backing
- Monopoly-ish niche (full-range PMC supply)
- Zero debt
- Consistent OPM ~25–30%
Fair Value Range:
- Base Case: ₹1,800
- Bull Case: ₹2,400
- Panic Button Buy Zone: ₹1,400
6. What’s Cooking – News, Triggers, Drama
- Q4FY25 Net Profit: ₹11 Cr (YoY up ~10%)
- Margins bouncing back: From 21% in FY24 Q1 to 29% in FY25 Q4.
- Auditor Change & Board Appointments (May 2025) – Routine, but always worth monitoring.
- German parent in control – But shareholder value has room to be… enhanced, let’s say.
- Dividend? Low payout at ~10% of profits. Don’t hold your breath.
7. Balance Sheet
| Metric | FY25 |
|---|---|
| Equity Capital | ₹4 Cr |
| Reserves | ₹380 Cr |
| Borrowings | ₹0 |
| Other Liabilities | ₹42 Cr |
| Total Liabilities | ₹427 Cr |
| Fixed Assets + CWIP | ₹139 Cr |
| Other Assets | ₹288 Cr |
Key Highlights:
- Cash-rich, asset-light.
- No debt.
- Book Value: ₹876
- CMP / BV: ~2.2x
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Flow (₹ Cr) |
|---|---|---|---|---|
| FY23 | 26 | -22 | -3 | +2 |
| FY24 | 26 | -20 | -3 | +3 |
| FY25 | 32 | -29 | -4 | -1 |
Takeaway:
They generate cash, invest in capex steadily (₹20–30 Cr annually), and stay far away from loans.
9. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROCE | 14% |
| ROE | 9.79% |
| Dividend Yield | 0.41% |
| Cash Conversion | 183 days (!) |
Diagnosis:
Operationally sound, but working capital cycle is heavy. ROE could use some gym time.
10. P&L Breakdown – Show Me the Money
| Year | Sales (₹ Cr) | Expenses | OPM % | Net Profit | EPS (₹) |
|---|---|---|---|---|---|
| FY23 | 164 | 123 | 25% | 32 | 72.3 |
| FY24 | 180 | 134 | 25% | 36 | 82.62 |
| FY25 | 190 | 140 | 27% | 36 | 81.66 |
11. Peer Comparison
| Company | PE | ROE | Dividend | OPM | M.Cap (₹ Cr) |
|---|---|---|---|---|---|
| Garware Tech | 39.8 | 18.7% | 0.06% | 20.7% | 9,215 |
| Vardhman Textiles | 16.4 | 9.3% | 0.8% | 12.9% | 14,469 |
| KPR Mills | 51.6 | 17.0% | 0.41% | 19.5% | 41,207 |
| Voith Paper | 23.8 | 9.8% | 0.41% | 26.5% | 853 |
Takeaway: Voith is smaller, less volatile, and less glamorous — but margins and balance sheet outperform expectations.
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: 74.04% (unchanged since forever)
- Public Float: 25.83%
- DIIs: Nearly non-existent (0.11%)
- Shareholder Count: ~5,300 retail holders
Boring? Yes. Stable? Also yes.
13. EduInvesting Verdict™
Voith Paper Fabrics is the Benjamin Button of Indian textiles — it grows quietly, looks conservative, and ages in reverse with increasing efficiency.
No debt. Consistent profits. Generous margins. But painfully slow growth.
It’s the kind of stock Warren Buffett might buy… and then forget he ever bought it, until it doubles in 5 years.
If you’re into niche monopolies, German discipline, and felt-good fundamentals – Voith might just “fabric” your wealth.
Metadata
– Written by EduInvesting | 17 July 2025
– Tags: Voith Paper Fabrics, German Promoter, Paper Machine Clothing, Niche Monopoly, Textile Machinery
