Shreenath Paper Products profit falls 68% despite revenue growth

Shreenath Paper Products Limited reported standalone profit after tax of Rs 66.81 lakh for the half year ended 30 September 2026, down 68% from Rs 2.08 crore in the preceding half, despite revenue from operations rising 24% year on year to Rs 68.54 crore.

How did Shreenath Paper Products perform in the September half?

Shreenath Paper Products increased standalone revenue from operations to Rs 68.54 crore for the half year ended 30 September 2026, from Rs 55.38 crore in the half year ended 30 September 2025 and Rs 59.28 crore in the half year ended 31 March 2026. Revenue was therefore Rs 13.16 crore higher year on year and Rs 9.26 crore above the immediately preceding six-month period.

Standalone total income was Rs 69.45 crore, compared with Rs 56.90 crore a year earlier and Rs 64.67 crore in the March 2026 half. Profit before tax, however, declined to Rs 89.35 lakh from Rs 1.03 crore in the September 2025 half and Rs 2.81 crore in the March 2026 half, showing that higher sales did not translate into higher pre-tax earnings.

Standalone profit after tax was Rs 66.81 lakh, versus Rs 77.16 lakh a year earlier and Rs 2.08 crore in the preceding half. Basic and diluted earnings per share were Rs 0.34 for the September 2026 half, compared with Rs 0.39 in September 2025 and Rs 1.06 in March 2026, on shares with a face value of Rs 10 each.

Why did Shreenath Paper Products' profit decline despite revenue growth?

Shreenath Paper Products' profit declined as purchases of stock in trade, employee costs and other expenses rose, while other income was substantially lower than in the March 2026 half. Purchases of stock in trade reached Rs 66.86 crore, up from Rs 53.19 crore a year earlier and Rs 57.88 crore in the preceding half, against September-half revenue of Rs 68.54 crore.

Other income was Rs 90.06 lakh, compared with Rs 1.52 crore in the September 2025 half and Rs 5.38 crore in the March 2026 half. Employee benefit expense increased to Rs 1.04 crore from Rs 86.81 lakh a year earlier, while other expenses were Rs 1.03 crore, compared with Rs 75.87 lakh in the preceding half.

Finance costs were Rs 1.27 crore, marginally above Rs 1.20 crore in the March 2026 half, although below Rs 1.57 crore a year earlier. The statement recorded a negative Rs 1.74 crore change in work-in-progress and finished-goods inventories, against a Rs 94.98 lakh positive change in the preceding half, while total expenses increased to Rs 68.55 crore from Rs 61.85 crore sequentially.

What happened to Shreenath Paper Products' working capital and cash flow?

Shreenath Paper Products reported standalone net cash used in operating activities of Rs 6.65 crore for the half year ended 30 September 2026, after Rs 6.44 crore of cash used in operations and Rs 21.60 lakh of net tax paid. Operating profit before working-capital changes was Rs 2.25 crore, indicating that movements in operating assets and liabilities outweighed that pre-working-capital amount.

Trade receivables used Rs 2.77 crore of cash during the half, inventories used Rs 1.74 crore and other current assets used Rs 1.96 crore. Loans and advances used a further Rs 32 lakh, while trade payables generated Rs 25.41 lakh, according to the standalone cash-flow statement.

Standalone inventories were Rs 12.79 crore at 30 September 2026, compared with Rs 11.05 crore at 31 March 2026. Short-term loans and advances rose to Rs 5.88 crore from Rs 3.92 crore, while short-term provisions increased to Rs 49.11 lakh from Rs 11.14 lakh over the same period.

How did Shreenath Paper Products' balance sheet change?

Shreenath Paper Products' standalone total assets increased to Rs 88.17 crore at 30 September 2026 from Rs 80.42 crore at 31 March 2026. Reserves and surplus rose to Rs 26.31 crore from Rs 25.64 crore, while share capital remained Rs 19.65 crore at both reporting dates.

Long-term borrowings were Rs 5.49 crore at 30 September 2026, up from Rs 3.08 crore at the March 2026 year end. Property, plant and equipment was Rs 2.42 crore versus Rs 2.41 crore, and non-current investments increased to Rs 42 lakh from Rs 28.50 lakh.

The standalone cash-flow statement reported Rs 7.56 crore generated from financing activities in the September half, while investing activities used Rs 8.80 lakh. Investing cash use included Rs 8.85 lakh for property, plant and equipment, partly offset by Rs 5,000 from the sale of property, plant and equipment.

What does first-time consolidation mean for Shreenath Paper Products' results?

Shreenath Paper Products reported consolidated revenue from operations of Rs 78.36 crore and consolidated profit after tax of Rs 1.18 crore for the half year ended 30 September 2026. Net profit attributable to equity shareholders of the holding company was Rs 1.05 crore after Rs 12.73 lakh was attributed to minority interest.

The September 2026 half is the first period for which Shreenath Paper Products presented consolidated interim financial results. The filing says earlier comparative consolidated columns relate to the holding company alone, because Shreenath Paper Industries Private Limited was not included in the group at those earlier reporting dates; those figures are therefore not like-for-like group comparisons.

Shreenath Paper Products held 75% of the subsidiary's issued equity share capital at 30 September 2026, with the other 25% held by a non-controlling shareholder. The subsidiary was established to manufacture sublimation paper previously procured and traded by Shreenath Paper Products, as part of the stated backward-integration and internal-sourcing plan.

The filing records Rs 15.23 lakh of minority interest at 30 September 2026, comprising Rs 2.50 lakh linked to issued share capital and Rs 12.73 lakh in post-acquisition reserves. It also records Rs 2.67 crore of subsidiary share application money pending allotment, including Rs 2.17 crore received from Shreenath Paper Products and Rs 50 lakh received from the minority shareholder.

Conclusion

Shreenath Paper Products recorded a 24% year-on-year increase in standalone September-half revenue to Rs 68.54 crore, but profit after tax fell to Rs 66.81 lakh as trading purchases increased, other income declined and working-capital movements produced Rs 6.65 crore of operating cash outflow. The first consolidated result added Rs 9.82 crore of revenue and Rs 50.92 lakh of profit after tax relative to the standalone result.

The next disclosure should clarify whether manufacturing at the subsidiary changes the group's sourcing mix for sublimation paper and the related trading-purchase requirement. The filing also says the date on which control of the subsidiary was first obtained must be confirmed before final issue, while the consolidated cash-flow statement must be fully reconciled and approved before filing; the Rs 2.67 crore pending share application money also remains subject to management's assessment of allotment, refund and classification requirements.