Kuantum Papers Ltd (BOM:532937) Q4 2025 Earnings Call Highlights: Navigating Challenges with ...
Release Date: May 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Kuantum Papers Ltd (BOM:532937) maintained its sales and production volume in FY25 despite lower realizations.
The company achieved the highest ever biomass usage at 48%, reflecting a commitment to greener operations.
Significant progress in Project Nirman aimed at enhancing operational excellence through Industry 4.0 tools and automation.
Mill expansion and upgradation project is on track, with purchase orders worth approximately 540 crores already issued.
Development of a new copier grade paper using a higher proportion of agro pulp, aligning with sustainable manufacturing goals.
The Indian paper industry faces strong headwinds due to rising raw material costs and cheaper imports from China and ASEAN countries.
Operational income for Q4 declined by 7% year-on-year, and net profit decreased by 23% year-on-year.
The company reported a 9% decline in operational income for the financial year ending 2025 compared to the previous year.
Margins were pressured due to lower realizations and increased raw material costs.
The company faces competition from the MDF industry for raw material procurement, contributing to increased wood pricing.
Warning! GuruFocus has detected 3 Warning Sign with BOM:532937.
Q: How is Kuantum Papers addressing environmental concerns related to water usage in paper manufacturing? A: Mr. Bhavan Kean, Vice Chairman and Managing Director, explained that while paper manufacturing does consume water, Kuantum Papers treats this water in state-of-the-art treatment plants and provides it to surrounding villages for irrigation. The company has also reduced groundwater usage by sourcing water from a nearby dam, thus mitigating environmental impact.
Q: Is there any restatement of previous quarters' volume numbers? A: Mr. Vikram Keta, Chief Financial Officer, clarified that previous reports included byproducts like pulp in sales figures. Moving forward, only paper sales will be reported, which explains the apparent decline in volume.
Q: What is the outlook for writing and printing paper prices in the short term? A: Mr. Bhavan Kean indicated that prices are expected to increase due to rising international wood prices and recent increases in board paper prices. A 6-7% price increase is anticipated, which would benefit the industry.
Q: How will Kuantum Papers utilize its expanded capacity post-March 2026? A: The company plans to commission upgrades to its paper machines by March 2026, with full capacity utilization expected by the 2026-27 financial year. The existing dealer network is expected to absorb the increased production.
Q: What is the company's stance on dividend policy and potential entry into new segments like molded cutlery? A: While there is no concrete dividend policy, the board is aware of the need to provide returns to investors. Currently, the focus is on completing the ongoing CapEx projects, and there are no immediate plans to enter new segments like molded cutlery.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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