The Indian paper and paperboard industry is entering a period in which growth alone is becoming a less meaningful measure of business performance. The June 2026 quarter illustrates this clearly: several companies reported strong revenue growth, but the conversion of that growth into operating profit varied substantially across the industry.

Paper manufacturing is inherently exposed to movements in wood and fibre costs, imported pulp, chemicals, coal and energy, while profitability is also influenced by product mix, capacity utilisation, pricing discipline and financial leverage. Consequently, companies with stronger cost structures, differentiated products and lower interest burdens can generate substantially better returns than competitors operating in the same broad industry environment.

This report analyses the Q1 FY2026–27 financial results of the following companies:

1. Andhra Paper Limited

2. ITC Limited – Paperboards, Paper & Packaging segment only

3. Emami Paper Mills Limited

4. JK Paper Limited

5. Kuantum Papers Limited

6. N R Agarwal Industries Limited

7. Pudumjee Paper Products Limited

8. Seshasayee Paper and Boards Limited

9. Tamil Nadu Newsprint and Papers Limited (TNPL)

10. West Coast Paper Mills Limited

The June quarter does not indicate that every paper company is benefiting equally from improved market conditions. Instead, it shows a widening gap between companies that can convert revenue into profit and those whose gains are being absorbed by input costs, depreciation or interest expenses.

The strongest themes emerging from the results are:

1. Profit recovery was widespread but uneven.
West Coast, Emami, Seshasayee, JK Paper, Andhra Paper and N R Agarwal reported substantial improvements in profitability.

2. Cost inflation remains the industry's principal risk.
TNPL explicitly highlighted higher costs of imported coal, pulp and chemicals, while Kuantum's results show how rapidly rising material, chemical and energy costs can erode profits despite strong revenue growth.

3. Product mix is becoming increasingly important.
JK Paper attributed its improved performance to higher volumes and an enriched product mix, while ITC reported strong performance in value-added paperboards, sustainable packaging and exports. ITC's management commentary similarly describes improved realisations and growth in packaging products.

4. Low financial leverage provides a significant advantage.
Companies with low finance costs have greater resilience when commodity costs rise. Seshasayee is particularly notable in this respect.

5. Revenue growth should not be confused with earnings quality.
Kuantum is the clearest example: revenue increased sharply, but PAT declined because cost increases were even more significant.

3. Comparative Financial Scorecard

Q1 FY2026–27 Performance

4. Industry-Level Financial Analysis

4.1 Revenue Growth: Demand conditions appear constructive

The strongest reported top-line growth came from:

• Kuantum Papers: +36.3%

• Seshasayee: approximately +26%

• N R Agarwal: approximately +24%

• Emami Paper: +21.8%

• West Coast's core paper segment: improved year-on-year

This suggests that the operating environment was supportive for a number of producers. However, the more important observation is that revenue growth did not produce uniform profit growth.

The industry is separating into two groups:

Companies converting growth into profits

• JK Paper

• Emami Paper

• Seshasayee

• N R Agarwal

• West Coast

• Andhra Paper

Companies experiencing weak profit conversion

• Kuantum

• TNPL

This distinction is likely to be more important than headline sales growth as the industry moves through the next few quarters.

4.2 Profitability: the strongest indicator of competitive position

🟢 High-quality profit performers

JK Paper, Pudumjee, Seshasayee and West Coast stand out for different reasons.

JK Paper delivered EBITDA of ₹2,588 million and PAT of ₹1,130 million, with management attributing the improvement to higher volume and an enriched product mix.

Pudumjee generated EBITDA of ₹511.9 million and PAT of ₹337.2 million. However, PAT was lower than the prior year, partly reflecting the movement in other income and higher depreciation and finance costs rather than a collapse in core operations.

Seshasayee nearly doubled PAT from ₹170.6 million to ₹335.9 million, representing one of the strongest operational improvements in the peer group.

West Coast's paper segment profit before interest and tax increased to ₹621.2 million on a standalone basis from ₹521.9 million in the comparable quarter, indicating genuine improvement in the core paper operation.

4.3 Input Costs: the critical differentiator

The quarter demonstrates the importance of raw-material and energy management.

Kuantum Papers is the clearest warning signal

Revenue increased from ₹2,229.2 million to ₹3,037.5 million, but:

• Material costs increased from ₹755.4 million to ₹1,293.4 million

• Power and fuel costs increased from ₹289.7 million to ₹419.5 million

• Chemical costs increased from ₹420.5 million to ₹603.5 million

• Finance costs increased

As a result, PAT fell from ₹120.6 million to only ₹62.3 million.

Expert interpretation: Kuantum's Q1 demonstrates negative operating leverage. Sales growth is impressive, but the company is not currently retaining enough of that growth as profit.

TNPL faces similar cost pressures

TNPL explicitly stated that geopolitical uncertainty and West Asia-related disruptions increased the prices of coal, pulp and chemicals, affecting paper and packaging-board production costs.

This reinforces an important industry principle:

The next phase of sector performance will depend less on demand growth and more on each company's ability to protect margins against volatile input costs.

5. Company-by-Company Analysis

5.1 Andhra Paper — Resilient earnings despite disruption

Andhra Paper reported revenue from operations of ₹3,937.7 million, essentially unchanged year-on-year. Despite the flat top line, PBT increased to ₹405.5 million and PAT to ₹303.2 million from ₹213.1 million.

The result is particularly notable because its Kadiyam unit experienced a strike and lockout. Operations only partially resumed after the quarter, with the company reporting approximately 93% of normal capacity at the time of disclosure.

Assessment

The earnings performance was better than the revenue trend suggests. However, the next quarter will be important to determine whether full operational normalization leads to higher volumes without compromising margins.

Overall view: Positive operational resilience.

5.2 ITC – Paperboards, Paper & Packaging — Scale with improving segment economics

ITC's consolidated Paperboards, Paper & Packaging segment reported revenue of ₹23,102.7 million compared with ₹21,166.2 million a year earlier. Segment result increased from ₹1,514.0 million to ₹2,168.1 million.

This represents a significant improvement in segment profitability.

ITC's management highlighted:

• Strong performance in value-added products

• Growth in sustainable paperboards and packaging

• Broad-based improvement in net realisations

• Moderating wood costs year-on-year

• Strong growth in flexible and carton packaging

5.3 Emami Paper — The strongest turnaround story

Emami's revenue increased 21.8% to ₹5,601.6 million. PBT rose dramatically from ₹93.5 million to ₹532.6 million, while PAT increased from ₹63.1 million to ₹386.1 million.

What makes this important?

This is not a minor improvement—it represents a substantial turnaround in quarterly earnings.

However, material costs increased to ₹3,528.4 million and finance costs remain meaningful at ₹169.6 million.

Assessment

The momentum is highly encouraging, but one quarter is insufficient to establish a new long-term earnings base. Emami should be closely monitored for consistency in the next two to three quarters.

Overall view: High-momentum turnaround; sustainability needs confirmation.

5.4 JK Paper — Strong execution and improving strategic positioning

JK Paper delivered one of the most balanced results in the peer group:

• Revenue from operations: ₹16,997.9 million

• EBITDA: ₹2,588.2 million

• PBT: ₹1,520.0 million

• PAT: ₹1,130.0 million

PAT increased from ₹762.2 million in the comparable period.

Strategically, the company:

• Increased its stake in Borkar Packaging to 87.36%

• Commenced production at its Hardwood BCTMP pulp plant in Gujarat

• Continued to benefit from higher volume and improved product mix

Assessment

JK Paper has one of the strongest combinations of current financial performance and strategic positioning. Its packaging investments and pulp integration have the potential to improve the resilience and quality of earnings.

Overall view: One of the strongest all-round businesses in the peer group.

5.5 Kuantum Papers — Revenue growth without earnings conversion

Kuantum reported exceptional revenue growth, with revenue from operations increasing 36.3% to ₹3,037.5 million. However, PBT declined to ₹107.7 million and PAT declined almost 48% to ₹62.3 million.

Assessment

This is the weakest earnings-quality result among the companies reviewed. The company is clearly growing, but the current cost structure is preventing it from converting growth into shareholder earnings.

The key issue for future quarters: Can Kuantum raise realisations or reduce its input-cost intensity?

Overall view: Operational caution warranted until margins recover.

5.6 N R Agarwal Industries — Strong recovery with continued cost sensitivity

N R Agarwal reported revenue from operations of approximately ₹6,469.6 million, compared with approximately ₹5,214.2 million in the prior-year quarter. PBT increased to ₹457.6 million and PAT to ₹349.8 million from ₹165.5 million.

The company demonstrated strong operating momentum, but its business remains exposed to movements in raw materials, power and financing costs.

Assessment

A strong quarter and significant profit recovery. The key question is whether the company can maintain this level of profitability if commodity costs remain elevated.

Overall view: Strong momentum, with moderate earnings volatility risk.

5.7 Pudumjee Paper Products — Strong margins, but examine earnings composition

Pudumjee reported:

• Revenue from operations: ₹2,029.2 million

• EBITDA: ₹511.9 million

• PBT: ₹446.9 million

• PAT: ₹337.2 million

Revenue grew modestly, while PAT declined from ₹362.4 million.

The segment data shows that the Paper business remains the dominant earnings contributor, while the Hygiene Products business is smaller and contributes relatively modest profitability.

Assessment

Pudumjee continues to demonstrate excellent profitability for its size, but the modest decline in earnings means future growth will need to come from operational expansion rather than simply maintaining current margins.

Overall view: High-quality margins and strong business economics.

5.8 Seshasayee Paper — One of the most impressive operational recoveries

Seshasayee's total income from operations increased to ₹5,052.5 million from ₹3,996.9 million. PBT increased from ₹230.6 million to ₹451.0 million, while PAT increased from ₹170.6 million to ₹335.9 million.

Why the result is particularly attractive

The company combines strong growth with a relatively low financial burden. This provides greater protection against cyclical downturns and input-cost volatility.

Assessment

Seshasayee produced one of the best combinations of growth, profit improvement and financial discipline in the group.

Overall view: High-quality operational performer.

5.9 TNPL — Back in profit, but the recovery remains fragile

TNPL reported:

• Total revenue: ₹11,603.8 million

• EBITDA: ₹1,286.1 million

• PBT: ₹76.8 million

• PAT: ₹57.4 million

This compares with a loss after tax of ₹74.1 million in the corresponding quarter.

However, production volumes declined:

• Paper production: 99,914 MT versus 106,375 MT

• Packaging-board production: 48,064 MT versus 49,682 MT

Finance cost of ₹429 million and depreciation of ₹780.3 million absorbed most of EBITDA.

Assessment

TNPL has achieved a return to profitability, but the margin of safety remains extremely thin. It needs either stronger volumes, better pricing or lower costs to create a more durable earnings recovery.

Overall view: Turnaround in progress, but still financially and operationally vulnerable.

5.10 West Coast Paper — Strong core performance, but comparability requires caution

West Coast's standalone Paper & Paper Board segment generated revenue of ₹5,052.9 million and segment profit before interest and tax of ₹621.2 million, compared with ₹5,219.2 million in segment profit in the comparable period.

On a consolidated basis, the Paper & Paper Board segment generated ₹8,990.6 million of revenue and ₹1,029.6 million of segment result before interest and tax.

Important analytical caution

West Coast's overall company financials also include telecommunications cable operations. Therefore, pure company-level PAT is not a clean measure of paper-business profitability.

Assessment

The core paper segment continues to demonstrate strong profitability and substantial scale. However, the non-paper businesses mean that direct comparison with single-segment paper companies should focus primarily on segment data.

Overall view: Strong paper business with above-average profitability.

6. Peer Comparison by Key Business Characteristics

🏆 Best Current Operating Momentum

Tier 1

JK Paper
Seshasayee Paper
West Coast Paper

These companies combine meaningful operating scale with strong profitability or strategic improvement.

Tier 2

ITC Paperboards, Paper & Packaging
Pudumjee Paper
Andhra Paper

Strong business economics, although each has different comparability considerations.

Tier 3 – High Momentum / Higher Uncertainty

Emami Paper
N R Agarwal

Both demonstrated strong earnings improvement, but the sustainability of the current profit trajectory remains important.

Tier 4 – Recovery / Margin Risk

TNPL
Kuantum Papers

TNPL has returned to profit but remains thinly profitable. Kuantum's cost pressures have materially reduced earnings conversion.

7. Earnings Quality Assessment

Highest Earnings Quality

🥇 JK Paper

Strong volumes, product mix improvement, strategic integration and packaging expansion.

🥈 Seshasayee

Excellent profit growth combined with a comparatively low financial burden.

🥉 Pudumjee

High operating margins and strong core paper economics, although growth needs to improve.

ITC Paperboards, Paper & Packaging

Excellent scale and strategic capabilities, but segment reporting limits direct comparison with standalone pure-play companies.

Most Improved Earnings

Emami Paper

The largest percentage turnaround in profitability.

N R Agarwal

Strong top-line and bottom-line recovery.

Andhra Paper

A particularly resilient performance considering the operational disruption.

Weakest Earnings Quality

Kuantum Papers

The most significant example of revenue growth failing to translate into profit.

TNPL

Positive turnaround, but heavy depreciation and finance costs leave little room for operational setbacks.

8. Strategic Themes Shaping the Industry

8.1 Packaging is becoming increasingly important

Packaging provides an opportunity to reduce dependence on traditional commodity paper grades and participate in higher-value applications.

JK Paper's increased ownership in Borkar Packaging and ITC's growth in flexible and carton packaging demonstrate this strategic direction.

Industry implication

Companies with a growing presence in value-added paperboard and packaging may achieve more stable realisations and better long-term margins than companies concentrated entirely in commoditised grades.

8.2 Raw-material integration will increasingly matter

The profitability difference between companies is likely to widen if imported pulp, chemicals and energy remain volatile.

Companies that can secure fibre supply, improve pulp integration or exercise greater control over input costs should have a structural advantage.

JK Paper's commencement of the BCTMP plant is therefore strategically significant, even though its full financial impact will take time to become visible.

8.3 Financial leverage is a major competitive differentiator

Paper manufacturing is capital intensive. High depreciation and interest costs can turn a reasonable operating performance into weak net profitability.

TNPL is the clearest example in this quarter: EBITDA was ₹1,286.1 million, but PBT was only ₹76.8 million after depreciation and finance costs.

Industry implication

During periods of volatile input prices, low-debt companies have substantially greater strategic flexibility.

The Indian paper industry is recovering—but the recovery is not uniform.

The June 2026 quarter demonstrates that the sector is moving toward a more favourable demand and revenue environment, but competitive advantage is increasingly determined by the ability to protect margins.

The strongest companies are demonstrating one or more of the following characteristics:

• Better product mix

• Value-added and packaging exposure

• Strong cost discipline

• Lower finance costs

• Improved capacity utilisation

• Greater raw-material integration

• Consistent conversion of revenue into operating cash and profit