Depressed paper market sentiments squeeze Q1 FY26 profits of leading paper firms; JK Paper emerges strong in corrugated segment

Depressed paper market sentiments squeeze Q1 FY26 profits of leading paper firms; JK Paper emerges strong in corrugated segment
- JK Paper’s Board approves acquisition of majority stake in Borkar Packaging Private Limited
- TNPL reported Loss after tax for the quarter ended 30th June, 2025 is 7.41 Crore as against profit after tax of 21.91 Crore in the corresponding quarter of the previous year.
- The headwinds from cheap imports resulting in depressed sales realization and ongoing high domestic wood prices.
The Pulp and Paper Times

India’s paper industry experienced a tough first quarter of FY25-26, grappling with rising raw material costs, a surge in imports, and falling market prices. Major companies such as JK Paper Ltd., Tamil Nadu Newsprint and Papers Ltd. (TNPL), and Emami Paper Mills Ltd. posted mixed financial results, with profitability strained by elevated wood prices and reduced realizations. Nevertheless, these firms are maintaining their focus on enhancing operational efficiency, advancing sustainability efforts, and pursuing strategic growth initiatives to adapt to the shifting market environment.

JK Paper

Indian paper and packaging board maker JK Paper reported Q1 FY26 of lower profits, as high prices of wood pressured its margins.

JK Paper rose 2.34% to Rs 359.35 after its consolidated net profit jumped 6.60% to Rs 81.23 crore in Q1 FY26, compared to Rs 76.20 crore posted in Q4 FY25.

However, revenue from operations declined by 0.90% quarter-on-quarter (QoQ) to Rs 1,674.16 crore in the quarter ended 30 June 2025. On a year-on-year (YoY) basis, net profit fell 41.86%, while revenue from operations shed 2.30% in Q1 FY26.

Reflecting on the results, Mr. Harsh Pati Singhania said, “The Company’s core business in Paper and Paper Board continued to face headwinds from cheap imports resulting in depressed sales realization and ongoing high domestic wood prices. Despite this, JK Paper improved its profits on a sequential basis.”

Tamil Nadu Newsprint and Papers Ltd

TNPL reported a total revenue of Rs. 1154.55 Crore for the quarter ended 30th June, 2025 as against Rs. 1129.85 Crore in the corresponding quarter of the previous year.

The drop in market prices of Paper & Paper Board and increase in cost of raw materials have adversely impacted profitability in the quarter ended 30th June, 2025. The Company is proactively taking various measures like introducing premium products & focus on higher realisation products to improve the sales and profitability in the forthcoming quarters.

TNPL earned Profit before Interest, Depreciation and Tax (EBITDA) of Rs. 113.92 Crore for the quarter ended 30th June, 2025 as against 161.10 Crore in the corresponding quarter of the previous year.
After providing 77.33 Crore towards depreciation & amortization and Rs. 48.41 Crore for finance cost, the company incurred loss before tax of 11.82 Crore for the quarter ended 30th June, 2025 as against profit before tax of 34.06 Crore in the corresponding quarter of previous year.

Loss after tax for the quarter ended 30th June, 2025 is 7.41 Crore as against profit after tax of 21.91 Crore in the corresponding quarter of the previous year.

Emami Paper Mills 

Emami Paper Mills (EPM) Reports Decline in Profitability Amid Financial Health Reevaluation in July 2025.

EPM has announced its financial results for the quarter ending June 2025, revealing a Profit After Tax of Rs 6.31 crore for the Q1 FY 26. The company's evaluation metrics have adjusted, reflecting a change in its financial health amid ongoing profitability challenges.

Emami Paper Mills Q1 FY26 results show a mixed performance. Revenue decreased by 8.72% year-over-year to Rs. 459.76 crore, and profit after tax (PAT) also declined by 50.70% to Rs. 6.31 crore compared to the same period last year. However, there was a 60.97% increase in PAT compared to the previous quarter. 

Acquisition of Borkar Packaging by JK Paper:

The Board of Directors of JK Paper Ltd. (JKPL) approved acquisition of a majority stake in Borkar Packaging Private Limited (BPPL). 

BPPL is engaged in the business of manufacturing Packaging products like Folding Cartons, Corrugated Boxes and Labels with seven (7) plants across the country with Revenue of Rs.393.20 crore in FY 2023-24. 

Commenting on the acquisition, Mr. Harsh Pati Singhania, Chairman & Managing Director, said, “The Packaging Conversion business is amongst the fastest growing segments in the Indian Paper and Packaging industry driven by growth in end use industries. The acquisition of BPPL is in line with the long term strategic objective of the Company and gives us an opportunity to offer combined solution to customers with respect to secondary and tertiary packaging. BPPL’s customers, employees, vendors and partners will benefit from JK Paper’s strong knowledge of manufacturing and its high standards in operational excellence, financial management and corporate governance.” 

The paper manufacturer said it will acquire a 72% stake in Goa-headquartered Borkar Packaging for about Rs 235 crore ($27 million) in cash consideration, according to a stock exchange filing. Of this, JK Paper will acquire 65.7% from existing shareholders and the remainder via subscription to fresh equity shares in Borkar.

Transaction is expected to be completed within twelve weeks of execution of a Share Purchase Subscription and Shareholder's Agreement (SPSSHA) with the target entity and its Promoters/Shareholders, subject to fulfillment of conditions mentioned in SPSSHA.

Acquisition of remaining 28 percent of equity shares is expected to be completed within the next 4 years from the closing date, as per SPSSHA, subject to fulfillment of conditions mentioned in SPSSHA.
Purchase consideration (including subscription) for acquisition of 72 percent stake of BPPL will be Rs. 125.46 per equity share of Rs. 10/- each, subject to adjustments as per terms of SPSSHA.
BPPL has its operations in India and its consolidated turnover during preceding three financial years was: Rs. 393.20 crore in FY 2023-24. Rs. 404.61 crore in FY 2A22-23 and Rs. 369.16 crore in FY 2021-22.

With this acquisition, JKPL will further strengthen its top leadership position in the Corrugated Packaging segment and emerge amongst the top three players in the Folding Cartons space. 
 

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