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    Kuantum Papers

    KUANTUM
    Forest Materials·9 Feb 2026
    Management Summary

    Kuantum Papers reported strong sequential growth in Q3 FY26, driven by improved operational income and significant margin expansion. Key capacity upgrades for PM1 and PCC were completed, contributing to record production. However, the industry continues to face challenges from low-priced imports and elevated raw material costs, though management anticipates some relief and positive policy outcomes.

    Highlights

    5

    • Operational income for Q3 FY26 stood at INR290 crores, reflecting a sequential growth of 4%.

    • EBITDA for Q3 FY26 was INR39 crores, marking a 14% quarter-on-quarter increase, with EBITDA margin improving by 125 basis points to 13.55%.

    • Profit after tax for Q3 FY26 was INR10 crores, with PAT margins at 3.38% and expansion of 131 basis points sequentially.

    • Paper Machine 1 rebuild successfully completed, increasing its capacity to 80 metric tons daily.

    • Precipitated Calcium Carbonate (PCC) capacity doubled from 25,000 TPA to 50,000 TPA, enhancing self-reliance in high-quality fillers.

    Concerns

    3

    • The Indian pulp and paper industry is navigating a difficult operating environment due to low-priced imports, which has weighed on industry margins.

    • Scarcity of agro fibres in Punjab continues to impact fibre pricing for the current and next quarter.

    • PM2 upgrade will involve a 30-day shutdown in February, and PM3 upgrade will take 45 days in May, potentially causing marginal impact on revenue and margin.

    Key financials

    Single quarter

    05 metrics
    1. 01Revenue₹290 Cr+4%QoQ
    2. 02EBITDA₹39 Cr+14.0%QoQ
    3. 03EBITDA Margin13.6%+1.3%QoQ
    4. 04PAT₹10 Cr+73.3%QoQ
    5. 05PAT Margin3.4%+1.3%QoQ

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹735 crores

    financed by banks and internal accruals

    Debt

    Debt disclosed

    Liquidity

    Undrawn ₹100 crores

    Working capital facility utilized at 70-80%.

    Guidance & targets

    13
    CategoryTargetPriority
    Revenue
    Q4 FY26 Top Line
    slightly better than Q3
    		Medium
    Revenue
    FY27 Annualized Top Line
    INR1,800 crores
    		High
    EBITDA Margin
    Q4 FY26 EBITDA Margin
    around that range (similar to Q3)
    		Medium
    EBITDA
    Q4 FY26 EBITDA per ton enhancement
    INR2,000 per ton
    		High
    EBITDA
    Future EBITDA per ton
    INR15,000 to INR17,000 per ton
    		High
    EBITDA
    FY27 Annualized EBITDA
    INR300 crores
    		High
    Realization/Pricing
    Industry-wide price hike
    INR2,000 to INR4,000 per ton
    		Medium
    Realization/Pricing
    Additional price hike
    at least INR2,000 per ton
    		High
    Capacity/Volume
    Total Production Volume
    2.35 lakh tons
    		High
    Capacity
    Tissue Paper Machine Capacity
    50 tons per day
    		High
    Industry Demand
    Paper Industry Demand Growth
    6% CAGR
    		High
    Capex
    Tissue Paper Machine Capex
    INR70 crores to INR80 crores
    		High
    Project Timeline
    Tissue Paper Machine Implementation Time
    16 to 18 months
    		High

    Q4 FY26 Revenue and EBITDA Margin

    Next quarter (Q4 FY26 results)
    CurrentQ3 FY26 Revenue INR290 crores, EBITDA Margin 13.55%
    TargetSlightly better than Q3 for revenue, around Q3 range for EBITDA margin

    Why it matters

    Verifies management's near-term outlook on improving financials and margin stability.

    Well, as I said, Q4 is going to be slightly better than Q3. And so overall, we should touch a top line of about INR1,100 crores. And EBITDA margins, as you're already seeing, will be around that range.

    How to verify

    key_financials.metrics[label='Revenue']

    Risks & concerns

    4
    RiskSeverity

    Influx of low-priced imports

    Low-priced imports, particularly from ASEAN countries and China, are weighing on industry margins, prompting engagement with policymakers for safeguard measures like MIP. — Management acknowledged

    high

    Elevated raw material costs (agro fibres)

    Scarcity of agro fibres in Punjab, exacerbated by past flooding, is keeping raw material prices high and is expected to impact fibre pricing for the current and next quarter. — Management acknowledged

    medium

    Competition from European players due to India-EU FTA

    Phased elimination of tariffs under the India-EU free trade agreement could introduce higher competition in certain specialty segments, though it also incentivizes efficiency improvements. — Management acknowledged

    low

    Digital substitution for paper products (online education)

    The impact of online education on paper demand is primarily limited to urban centers and a small percentage of the population, with physical education remaining dominant. — Analyst downplayed

    low

    Q&A highlights

    8

    “So that situation is continuing for the time being. There is a scarcity of agro fibres in the state of Punjab that we are present in. And unfortunately, that is going to impact fibre pricing, agro fiber pricing for us in this quarter as well as the next quarter.”

    Highlights ongoing raw material cost pressure due to agro fibre scarcity in Punjab, impacting current and next quarter margins.

    asked by Madhav Jhawar

    2 min read6 chapters

    Detailed Narrative

    01

    Operational Performance & Efficiency

    Kuantum Papers achieved significant operational milestones in Q3 FY26. The rebuild of Paper Machine 1 (PM1) was successfully completed in December 2025, increasing its daily capacity to 80 metric tons. The company also doubled its Precipitated Calcium Carbonate (PCC) capacity from 25,000 TPA to 50,000 TPA. These enhancements contributed to record-breaking production, with PM4 achieving 8,758 metric tons in December 2025 and PM1 reaching 91.4 metric tons in a single day.

    02

    Financial Performance Q3 FY26

    The company reported an operational income of INR290 crores for Q3 FY26, reflecting a sequential growth of 4%. EBITDA for the quarter stood at INR39 crores, marking a 14% quarter-on-quarter increase, with the EBITDA margin improving by 125 basis points to 13.55%. Profit after tax (PAT) was INR10 crores, and PAT margins expanded by 131 basis points sequentially to 3.38%.

    03

    Capacity Expansion & Upgrades

    Kuantum Papers is progressing with its mill upgradation and expansion program, part of an overall INR735 crores plan financed by banks and internal accruals. PM2 is scheduled for an upgrade in February 2026, requiring a 30-day shutdown, while PM3 will undergo a larger upgrade in May 2026, taking about 45 days. The company also plans to install a 50 tons per day tissue paper machine with an investment of INR70-80 crores, expected to be implemented in 16-18 months.

    04

    Raw Material & Pricing Dynamics

    The industry faces pressure from low-priced imports, impacting margins. Raw material costs, particularly for agro fibres in Punjab, remain elevated due to scarcity, expected to impact pricing in the current and next quarter. However, management anticipates wheat straw prices to decrease during the harvesting season starting April. Sales realizations improved by INR800 per ton in Q3, with an additional industry-wide hike of INR2,000 per ton already implemented and another similar hike expected by month-end.

    05

    Industry Outlook & Policy Support

    Management expressed confidence in an industry revival in the next financial year, expecting better pricing levels. Policy support, including temporary duty waivers on pulp and wastepaper and streamlined customs procedures from the Union Budget 2026, is expected to lower input costs. The India-EU free trade agreement is seen as supportive for exports of packaging board and kraft paper, while the government is seriously considering Minimum Import Price (MIP) for writing and printing grades to counter low-priced imports.

    06

    Future Growth & Product Innovation

    Kuantum launched 'Kuantum Kopio' copier brand (65, 70, 75 GSM) and 'Kuantum Pura' (65% Argo Pulp furnish) as part of product innovation. The company targets an annualized top line of INR1,800 crores and EBITDA of INR300 crores post PM3 operation, and a total production volume of 2.35 lakh tons by FY28 after all machines are upgraded. Demand for paper is projected to grow at a 6% CAGR, supported by government focus on education.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.