Satia Industries defers PM3 redevelopment; reports net loss in Q2. Kuantum’s net profit dips by 50%, with a decline in net sales realization of Rs. 3,200 per ton

Satia Industries defers PM3 redevelopment; reports net loss in Q2. Kuantum’s net profit dips by 50%, with a decline in net sales realization of Rs. 3,200 per ton

- Initial easing of wood prices and better raw material availability and lower fuel cost in next half of the year
- Production costs increased by around Rs. 1,300 per ton, largely on account of higher agro and wood-based raw material prices due to floods in Punjab

The Pulp and Paper Times

The paper industry continues to operate in a challenging environment, characterized by elevated input costs, particularly for wood and subdued realizations amid persistent inflow of low-priced imports. These pressures have impacted margins across the sector despite steady demand and improved sales volumes.

Satia Industries Limited (SIL) is one of the leading Writing and Printing paper manufacturer in India, has faced significant challenges in Q2 FY 26. 

SIL’s revenue for Q2FY26 declined 9% YoY to INR 3,111 Mn, compared to INR 3,401 in Q2FY25. The decline in revenue primarily was due to a reduction in paper realizations, which fell sharply due to soft market conditions and increased import competition. Additionally, higher imports from Southeast Asia intensified pricing pressure in the domestic market, leading to subdued demand and lower average realizations.

Commenting on the financial results, Executive Director Mr. Chirag Satia, said: “The domestic paper industry faced significant challenges this quarter. Operating costs, especially for wood, remained high, and market realizations were dampened by a persistent flow of low-priced imports. Furthermore, recent GST rate changes have resulted in an inverted duty structure, elevating working capital needs and compressing near-term margins. Representations have been made to the Govt. to correct these imbalances and create a level playing field.

Saita reported net loss of INR 245 Mn in Q2FY26, as compared to profit of INR 123 Mn in Q2FY25. Profitability majorly declined due to lower realizations and margin pressure from higher input costs

“Our company demonstrated resilience against these headwinds. Though our revenues dipped 9% year on-year, which is a reflection of temporary sector-wide stress, not diminished underlying demand. The PM3 redevelopment has been deferred to ensure operational continuity. Positive indicators, such as the initial easing of wood prices and better raw material availability and lower fuel cost in next half of the year, provide grounds for optimism regarding a phased recovery in profit margins

Looking ahead, we continue to focus on improving efficiency, driving sustainability, and growing our value-added portfolio. With a solid foundation and focused execution, we are confident of restoring growth and delivering value to all stakeholders.,” Mr. Saita said in a statement.

Kuantum Papers Ltd.

Kuantum Papers Ltd  (KPL)’s revenue for Q2FY26 INR 280 crores, compared to INR 223 crores in Q1FY26 280 crores, reflecting a sequential growth of 25.5%. This increase of Rs. 57 crores over the previous quarter was primarily driven by higher paper production and sales following the successful upgradation of paper machine 4. Overall production during the quarter was higher by 3,500 tons as compared to the same period last year. The EBITDA for the quarter stood at Rs. 34 crores, with EBITDA margin at 12.3%, lower by 582 basis points on quarter-to-quarter basis. The contraction in margin was mainly due to a decline in net sales realization by Rs. 3,200 per ton, in line with the overall industry trend impacted by cheaper imports. In addition, production costs increased by around Rs. 1,300 per ton, largely on account of higher agro and wood-based raw material prices due to floods in Punjab. KPL PAT for the quarter stood at Rs. 6 crores, translating to PAT margins of 2.07%.

KPL’s net profit for Q2 FY26 dipped by almost 50% from Q1 FY26, to INR 6 crore. 

“We are seeing a slight bit of impact in terms of increased import volumes in this current period as well as Q1. We have witnessed about 7% to 8% increased volumes coming into the country of imports. And in terms of metric ton-wise, it is close to about a million tons plus. So, this is something which at the moment is affordable and something that can be taken into the levels of competition by the industry,” Mr. Pavan Khaitan, VCMD of Kuantum Papers said during a conference call.
 

Web Title: Satia Industries defers PM3 redevelopment; reports net loss in Q2. Kuantum’s net profit dips by 50%, with a decline in net sales realization of Rs. 3,200 per ton