Nikita Papers

Nikita Papers reported a robust FY25, with revenue from operations increasing 9% year-on-year to ₹370 crores and EBITDA growing 24% to ₹50 crores. Profit after tax also saw an 11% rise to ₹23 crores. Over the past four years, the company has demonstrated a solid growth trajectory, achieving impressive CAGRs of 33% in revenue, 42% in EBITDA, and 66% in PAT, reflecting consistent operational excellence.

The company successfully raised ₹67.5 crores through its IPO in May 2025, with proceeds earmarked for a new 9-megawatt refuse-derived fuel (RDF) waste-to-energy power plant. This expansion, estimated at ₹50 crores, is projected to achieve 100% energy self-sufficiency within 15-18 months and a complete shift to green power within two years. This builds on existing captive power sources, including a 1.5MW solar plant and a 3.5MW municipal waste-to-energy plant, underscoring the company's commitment to sustainability.

Nikita Papers is strategically shifting its product mix towards higher-margin specialty grade papers, which currently constitute 8-10% of its total volume, with the remaining 88-90% in the corrugation segment. This shift, while contributing to a temporary decline in FY25 capacity utilization to 82% (from 1.08 lakh metric tons production), aligns with the company's value-driven growth objectives. The specialty grade segment is growing at an 18-20% CAGR, offering higher value addition and tailored solutions for customer needs.

The company utilizes 100% recycled waste paper, sourced locally from a 100km radius around Delhi, UP, and NCR, and also imports from the US and Canada for longer fiber content. Waste paper costs range from ₹18.5-19 per kg, with prices remaining stable for 15-20 days due to long-term agreements. The company manages its working capital cycle, which is longer for the corrugation segment, and aims to mitigate price volatility through delivery schedules and stock management, ensuring a robust procurement ecosystem.

Nikita Papers benefits significantly from Extended Producer Responsibility (EPR) credits, generating ₹5.29 crores in FY25. As an end-of-life cycle producer for plastic waste, the company processes municipal solid waste, with 60% of the total quantum credited as EPR credits. The commissioning of the 9MW waste-to-energy plant is expected to increase EPR credit generation by 2.5-3 times, providing a significant additional revenue stream and reinforcing the company's circular economy initiatives.

The company's debt profile includes a term loan of ₹32 crores and working capital (CCM) of ₹88 crores, with a cost of debt at 9% per annum. Unsecured loans from promoters are non-interest bearing. For FY26, Nikita Papers anticipates a modest industry top-line growth of 7-8%, with the full impact of the new power plant expected to be visible by Q4 FY27, driving further cost reduction and production capacity, positioning the company for sustained long-term growth.