Tamil Nadu Newsprint and Papers Limited Q2 profit falls

TNPL reported profit after tax of Rs 4.46 crore for the quarter ended 30 September 2026, down from Rs 8.10 crore a year earlier, as total expenses rose faster than total income. TNPL attributed pressure on paper and packaging-board margins to higher costs for imported coal, pulp, chemicals and logistics.

Why did TNPL's Q2 profit fall?

TNPL's profit after tax fell by Rs 3.64 crore year on year to Rs 4.46 crore in the September 2026 quarter, while profit before tax declined by Rs 6.45 crore to Rs 6.48 crore. Total income increased to Rs 1,216.51 crore from Rs 1,128.39 crore in the quarter ended 30 September 2025, but total expenses increased by Rs 94.57 crore to Rs 1,210.03 crore.

The September-quarter result was also lower than the immediately preceding quarter. Profit after tax was Rs 5.74 crore in the quarter ended 30 June 2026, so the September figure declined by Rs 1.28 crore even as total income increased by Rs 56.13 crore from Rs 1,160.38 crore. Profit before tax fell from Rs 7.68 crore in the June 2026 quarter to Rs 6.48 crore.

TNPL said geopolitical uncertainty associated with the West Asia crisis had substantially increased the costs of key imported materials, including coal, pulp and chemicals. The company also reported significantly higher logistics costs, which it said raised the production cost of paper and packaging board and affected margins during the quarter ended 30 September 2026.

Which TNPL costs increased most in Q2?

TNPL's power, fuel and water charge was the largest year-on-year expense increase, rising by Rs 76.03 crore to Rs 282.02 crore in the quarter ended 30 September 2026 from Rs 205.99 crore a year earlier. Cost of purchases and materials consumed increased by Rs 36.65 crore to Rs 603.70 crore from Rs 567.05 crore.

Employee benefit expense increased by Rs 9.91 crore to Rs 125.37 crore, while repair and maintenance expense rose by Rs 4.04 crore to Rs 56.41 crore. These increases were partly offset by a Rs 4.55 crore reduction in finance costs to Rs 45.47 crore and a Rs 8.72 crore decline in other expenses to Rs 71.15 crore.

The sequential figures also show higher fuel and material costs in the September 2026 quarter. Power, fuel and water charges rose by Rs 37.55 crore from Rs 244.47 crore in the June 2026 quarter, while materials consumed increased by Rs 98.20 crore from Rs 505.50 crore. Purchase of stock-in-trade declined by Rs 65.85 crore to Rs 6.58 crore, but total expenses still increased by Rs 57.33 crore from Rs 1,152.70 crore.

Did TNPL revenue and production grow in Q2?

TNPL's revenue from operations increased by Rs 93.38 crore year on year to Rs 1,203.53 crore in the quarter ended 30 September 2026. Gross sales and income from operations rose to Rs 1,187.54 crore from Rs 1,090.73 crore, although other operating income declined to Rs 15.99 crore from Rs 19.42 crore.

Paper production increased to 109,352 metric tonnes in the September 2026 quarter from 107,094 metric tonnes in the corresponding quarter a year earlier. Packaging board production rose to 53,255 metric tonnes from 50,360 metric tonnes. Thus, output increased in both disclosed product categories even as quarterly profit after tax declined to Rs 4.46 crore.

TNPL's segment disclosures show revenue growth in both reported operating segments before inter-segment eliminations. Paper and paper board segment revenue rose to Rs 1,196.97 crore from Rs 1,102.90 crore, while energy segment revenue increased to Rs 192.32 crore from Rs 145.26 crore. Inter-segment revenue increased by Rs 47.75 crore to Rs 185.76 crore, resulting in income from operations of Rs 1,203.53 crore.

How did TNPL's business segments perform in Q2?

TNPL's paper and paper board segment result before tax and interest declined to Rs 53.11 crore in the September 2026 quarter from Rs 60.08 crore a year earlier. The Rs 6.97 crore decline came despite a Rs 94.07 crore increase in the segment's revenue, consistent with the company's disclosure that higher production costs affected paper and packaging-board margins.

The energy segment result improved to a profit of Rs 3.09 crore from Rs 2.21 crore a year earlier. Combined segment result was nevertheless Rs 56.20 crore, compared with Rs 62.29 crore in the prior-year quarter. After finance costs of Rs 45.47 crore and other unallocable expenditure net of unallocable income of Rs 4.25 crore, TNPL reported profit before tax of Rs 6.48 crore.

For the half year ended 30 September 2026, TNPL reported total income of Rs 2,376.89 crore, compared with Rs 2,282.94 crore in the corresponding prior-year period. Profit before tax increased to Rs 14.15 crore from Rs 1.11 crore, and profit after tax rose to Rs 10.19 crore from Rs 0.69 crore. The half-year result includes Rs 5.74 crore of profit after tax in the quarter ended 30 June 2026.

What changed in TNPL's cash flow and balance sheet?

TNPL generated net cash from operating activities of Rs 307.35 crore in the half year ended 30 September 2026, compared with Rs 50.89 crore in the corresponding prior-year period. Cash from operations was Rs 316.90 crore, against an outflow of Rs 68.86 crore a year earlier, while inventories increased by Rs 110.82 crore during the six-month period.

TNPL spent Rs 213.71 crore on investing activities in the half year, including Rs 213.83 crore of additions to fixed assets, capital work-in-progress and capital advances. Net cash used in financing activities was Rs 122.93 crore, compared with net cash generated of Rs 191.48 crore in the prior-year half year. Cash and cash equivalents ended the period at a negative Rs 21.11 crore, including bank overdrafts of Rs 24.43 crore.

Total assets stood at Rs 6,307.06 crore at 30 September 2026, compared with Rs 6,210.11 crore at 31 March 2026. Inventories increased to Rs 1,083.15 crore from Rs 972.35 crore, while total equity declined to Rs 2,295.32 crore from Rs 2,315.98 crore. Total current liabilities rose to Rs 2,777.47 crore from Rs 2,604.98 crore over the same period.

Conclusion

TNPL's September-quarter figures show that increased sales and higher production did not offset cost inflation. Revenue from operations increased to Rs 1,203.53 crore and paper production reached 109,352 metric tonnes, but higher power, fuel, water and material costs contributed to a decline in profit after tax to Rs 4.46 crore.

The next disclosed corporate event is the postal-ballot process for shareholder approval of the reappointment of M Sathiyavathy as an independent director for a three-year term starting on 27 November 2026. TNPL set 13 November 2026 as the cut-off date for voting eligibility; its next results will indicate whether the imported-input and logistics costs identified in the September-quarter release persist.