Aten Papers & Foam Limited

Basic Materials — Paper & Paper Products · BSE

₹21.00₹0.00 (0.00%)

DalalBaazaar Score

71 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

The 60-second version of Aten Papers & Foam Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Aten Papers & Foam Limited engages in the paper trading business in India. It offers kraft paper, as well as trades wastepaper. The company also offers packaging solutions; and segregation of wastepaper services.

IndustryPaper & Paper Products

SectorBasic Materials

Annual revenue₹187 Cr

How does it make money?

Turns over ₹187 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 20.7%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 23.2% against a peer median of 22.3% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE22.3%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +105% while net margin moved +617% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+105%

Margin effect+617%

DalalBaazaar Score

71/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

74/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

88/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

2.5x

2Y Median

3.3x

18 monthly readings · mean 5.0x · range 2.1x–23.3x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 24% below its 2y median of 3.3x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 91% below the peer median of 28.7x.

vs. its own history

Cheap

3.3x median over 18 months · -24%

vs. sector peers

Cheap

28.7x median of 4 peers · -91%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

2.7x

PEG

0.02

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 2.0% to 5.6% over 3 years.
Debt is being paid down
Total debt is down 42% over 3 years.
Return on equity is rising
ROE has improved from 11.8% to 14.9%.
High return on capital employed
ROCE of 20.7% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.19x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 23.0% to 20.7% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Inventory building faster than salesFinancial
Inventory up 283% against revenue up 105% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹26 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 20.7% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 2.0% to 5.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 42% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 24% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 91% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 20% a year✓ 27.1% CAGR
Latest reported year was 48.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 4%✓ 5.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹26 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 18%✓ 20.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 11 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

7 good · 2 neutral · 2 weak

Market Cap

₹22 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

2.5x

Cheap

Cheap against the generic band

P/B Ratio

0.44x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹8.32

Profitable

Profitable on a per-share basis

ROE

23.2%

Strong

Strong capital efficiency

ROCE

20.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.19x

Low

Conservative leverage

Revenue Growth (YoY)

48.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-4.3%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹24 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

12.0%

Good

Assets are working hard

Operating Margin

5.9%

Average

Average margins

Net Margin

4.0%

Average

Average bottom-line conversion

Current Ratio

2.97

Comfortable

Healthy short-term liquidity

52W Range Position

46%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

22.0 / 21.0

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

47.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹91 Cr	₹97 Cr	₹139 Cr	₹187 Cr	+27.1%
EBITDA	₹2 Cr	₹5 Cr	₹11 Cr	₹10 Cr	+77.7%
EBITDA Margin	2.0%	5.3%	7.7%	5.6%	—
PAT (Net Profit)	₹1 Cr	₹3 Cr	₹7 Cr	₹7 Cr	+145.0%
EPS	₹0.49	₹2.7	₹6.81	—	—
ROE	11.8%	39.5%	49.9%	14.9%	—
ROCE	23.0%	54.2%	69.6%	20.7%	—
Total Debt	₹16 Cr	₹16 Cr	₹11 Cr	₹9 Cr	-16.5%
Free Cash Flow	₹0 Cr	₹2 Cr	₹5 Cr	-₹26 Cr	—

🟢 Revenue has grown at 27.1% a year over 3 years.

🟢 EBITDA has grown at 77.7% a year over 3 years.

🟢 EBITDA Margin has risen from 2.0% to 5.6% over 3 years (+3.6 pts).

🟢 PAT (Net Profit) has grown at 145.0% a year over 3 years.

🟢 ROE has risen from 11.8% to 14.9% over 3 years (+3.1 pts).

🔴 ROCE has fallen from 23.0% to 20.7% over 3 years (-2.2 pts).

🟢 Total Debt has shrunk at 16.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹0 Cr to -₹26 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹74 Cr

Total Liabilities

₹24 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

-₹25 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

69.0%

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

1 positive5 general

Aten Papers & Foam sets Sep 23 record date for 8th AGM e-voting

scanx.trade, 09 Sept

Aten Papers & Foam Limited Submits Q4FY26 Compliance Certificate to BSE

scanx.trade, 10 Apr

Aten Papers FY26 Results: Revenue surges 35%, net profit up 5%

scanx.trade, 07 SeptResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Aten Papers & Foam IPO GMP: Issue Size, Lot Size, Financials & Timeline

Equitypandit, 26 Mar

ATEN PAPERS Limited IPO Opens on June 13, 2025

TheWire.in, 13 Jun

M&M shares up for 3rd straight day, rebounds 34% from April low; here's why

Business Standard, 20 Jun

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Growth · Profitability · Valuation

MiddlingBusiness Quality

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑