Declining realizations impacted the financial performance of Satia Industries in Q2, with a focus on ongoing strategic initiatives

Declining realizations impacted the financial performance of Satia Industries in Q2, with a focus on ongoing strategic initiatives

- Satia Industries reported a steady volume of 1,05,840 MT for H1FY25, growing 2% YoY.
- SIL's revenue contracted 9% YoY to INR 3,401 Mn during Q2FY25 as compared to INR 3,734 Mn during Q2FY24 on account of higher imports
The Pulp and Paper Times | Punjab, 13 November 2024: 

Satia Industries Limited (SIL) one of the leading wood and agro-based paper manufacturer in India, announced its results for the second quarter ended September 30, 2024.

Reflecting the broader industry trend and demand, the company's revenue contracted 9% YoY to INR 3,401 Mn during Q2FY25 as compared to INR 3,734 Mn during Q2FY24 on account of higher imports. For H1FY25, revenues were INR 7,395 Mn.

Due to the lower realisations and relatively higher raw material prices, gross margins of SIL declined from 58.2% in Q2FY24 to 52.1% in Q2FY25. Gross margins for H1FY25 were 55.9%. Net profit stood at INR 123 Mn in Q2FY25, vs INR 479 Mn in Q2FY24 and INR 511 Mn in Q1FY25. For H1FY25, Net profit was INR 634 Mn.

Commenting on the financial results, Executive Director Mr. Chirag Satia, said: “The Indian paper industry continues to be shaped by contrasting dynamics. On one hand, India remains the fastest-growing paper market globally, with overall demand increasing at an annual rate of 6-7%, driven particularly by the packaging paper and paperboard segment expanding at 8.2% annually. On the other hand, the industry is navigating short-term challenges, including an increase in imports from China and ASEAN countries, contributing to pricing pressures in the domestic market.

Amidst this environment, Satia Industries Limited demonstrated resilience, maintaining steady volumes of 52,192 MT, supported by our strong partnerships with state textbook boards. While declining realizations impacted financial performance, our disciplined focus on cost control and operational efficiencies helped mitigate some of the pressures. We remain committed to strengthening our financial position through ongoing strategic initiatives, such as the renovation of PM3 and the installation of a Soda Recovery Boiler, which will enhance capacity and operational excellence.

Leveraging our strong industry presence and customer relationships, we are confident in navigating these market dynamics while striving to deliver growth and value to our shareholders.”

Satia Industries Limited (SIL), is one of the largest Wood and Agro-based paper manufacturer in India. SIL was incorporated by Dr Ajay Satia in 1980 and commenced its operations in 1984 with a small capacity of 4,950 tonne per year. It surprisingly overtook many of its peers in production achieve, to 2,13,804 MT in FY24 implying a capacity utilization of ~98%. SIL has successfully commissioned their PM 4 and has augmented its total installed capacity to 219,000 MTPA.
 

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