Barring unforeseen circumstances, FY26 is expected to be equally good, if not better, for Shreyans Industries. SIL will continue to focus on technological improvement and upgradation

Barring unforeseen circumstances, FY26 is expected to be equally good, if not better, for Shreyans Industries. SIL will continue to focus on technological improvement and upgradation
- A new Synchro Sheet Cutter is planned to be installed
- SIL’s Net profit after tax stood at INR 50.60 crores against INR 87.42 crores of last year
- The decline of more than 10% in prices of writing and printing paper coupled with higher costs led to lower margins

The Pulp and Paper Times

Shreyans Industries Limited (SIL) is operating with a wide product mix with well accepted quality in the market based on non-conventional raw materials. SIL has reported a major decline in its net profit after tax for FY 24-25. Net profit after tax stood at INR 50.60 crores against INR 87.42 crores of last year. 

During FY 24-25, SIL achieved a production of 87250 MTs as against 89466 MTs in the previous year. Total revenue of the Company was INR 634.58 crores against INR 734.15 crores of last year. Profit before interest & financial charges and depreciation stood at INR 87.33 crores. Net profit after tax stood at INR 50.60 crores against INR 87.42 crores of last year. The overall performance of your company in the current year could not match the previous year comparatively mainly due to drop in sales prices and higher proportion of lower GSM paper. The demand and overall market for writing and printing paper remained normal throughout the financial year although profit margins were under pressure during the year under review as compared to last year's profitability.

SIL renewed its endeavors to maintain its leadership in agro based writing & printing paper segment with the support & cooperation of all stake holders including committed team of professionals & workforce. The Company initiated certain steps for continual improvement in quality, product development and cost optimization on sustainable basis.

“The never in sight end of conflicts between Russia-Ukraine and Isreal-Palestine and threats of massive tariff war triggered by USA in the last quarter of the financial year had its own cascading effects on the trade and costs although these conflicts & threats did not directly affect the company's performance”. The annual report of SIL for FY 24-25 stated.

PERFORMANCE REVIEW

The market for paper during the year was average in terms of demand, revenue and profitability. The top line as well bottom line were affected as compared to the previous year on account of higher cost of inputs in India and low priced imports of paper from China and East Asia. The decline of more than 10% in prices of writing and printing paper coupled with higher costs led to lower margins. The unit wise performance of the Company is described as under:

SHREYANS PAPERS:

During the fiscal year, SIL significantly improved operations at its unit through the installation of a complete hood, pocket ventilation system, and an upgraded steam and condensate system on the machine. These enhancements contributed to operational efficiency and allowed the Company to maintain its competitiveness by focusing on streamlining processes, reducing costs, and maximizing output.

However, production levels during the year were lower compared to the previous year due to a planned shutdown undertaken for technical upgrades and the installation of new machinery and equipment as mentioned above.

Looking ahead, the Company plans to continue investing in capital expenditures with a focus on de-bottlenecking, enhancing capacity and capabilities, improving productivity, and reducing costs on a year-to-year basis. As part of this strategy, a new Synchro Sheet Cutter is planned to be installed at the unit to improve sheet quality, lower production costs, and enhance overall efficiency.

SHREE RISHABH PAPERS

Total Paper production in this unit was higher as compared to last year's production which was possible on account of increase in machine speed and better working during the year. Complete Automation in Stock Preparation area, New Folio Sheet Cutting machine with auto-counter & other automation features and Bundle Shrink Wrap machines were commissioned during the year. This helped in improving paper quality, chemical cost optimization and better finishing of paper & Packages. A few steps have been taken for improving and streamlining the working in Pulp mill area. It is expected to start giving desired results in the next financial year.

FUTURE PLANS/PROSPECTS

Proposed Capital expenditure have been discussed while reviewing the performance of both the units. Capital expenditure planned will help the Company in improving its operations in terms of quality along with cost effectiveness. 

The demand of paper during the year remained normal but low sales realizations due to competition from low priced imports ruled the market which had its impact on profitability.

The report further stated, that, we moved into FY26 under almost similar market conditions where both demand and prices are bearish. However, 2-3 months in summer are usually considered lean from demand point of view. As such, demand for paper has become sluggish, forcing the mills to liquidate stocks at further lower prices. This may not have further bearing on results in the current year because input costs are equally supportive. Barring unforeseen circumstances, it can be cautiously forecasted that the FY26 should be equally good if not better for the company. SIL shall continue to focus on improvisation in technology and up gradation of equipment to achieve sustainable growth.

OUTLOOK 

The paper industry has managed successfully all global or indigenous crisis during the last few years. The industry has recovered well from local issues and global disturbances caused by conflicts between some countries from time to time. 

Some noticeable facts such as rapid urbanization, increase in disposable income and sustainable trends augur well for the paper industry in the country. After achieving good performance during the last few financial years, we hope to continue the journey in FY 2025-26 too. Implementation of National Education Policy (NEP) 2020 and Samagra Shiksha Scheme along with other measures by Indian Government in field of education & literacy should lend considerable boost to the demand for writing and printing paper. Thrust on reducing/eliminating the use of single use plastic is going to support sustainable products such as paper. In recent years, India has become one of the large consumers of paper and paper board products though per capita consumption in India is much lower than world's average. Although packaging is leading the growth story yet writing & printing paper is also proliferating due to increasing business activity and development of education sectors. The market size for writing & printing paper is quite good but not as big as the packaging segment. Thus domestic market opportunities are quite promising and healthy. Further cost of manufacturing in India is quite competitive as compared to China which may help India gain and corner major chunk of global demand.
 

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