Kuantum Papers Limited

Basic Materials — Paper & Paper Products · NSE

₹72.50−₹0.33 (−0.45%)

DalalBaazaar Score

35 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by short-term liabilities exceed short-term assets, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, 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, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Kuantum Papers Limited manufactures and sells agro- and wood-based writing and printing, copier, and specialty paper products in India and internationally.

IndustryPaper & Paper Products

SectorBasic Materials

Employees1,399

Annual revenue₹1,085 Cr

How does it make money?

Turns over ₹1,085 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹15 left at the operating level before interest, tax and depreciation. Each of its 1,399 employees supports ₹77.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹77.6 lakh

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?Little sign of one

Returns on capital of 5.0% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

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 -17% while net margin moved -63% 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-17%

Margin effect-63%

DalalBaazaar Score

35/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 5.9% a year
✗ Profit has declined at 32.5% a year
✗ Profit fell 48.6% in the latest year

Quality vs. Valuation

Company Quality

28/ 100

Weak

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

Valuation

61/ 100

Fair

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

17.5x

3Y Median

7.4x

40 monthly readings · mean 8.5x · range 4.8x–15.9x

Sector Median

28.7x

median of 4 sector peers

⚠️Current valuation is approximately 136% above its 3y median of 7.4x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 39% below the peer median of 28.7x.

vs. its own history

Expensive

7.4x median over 40 months · +136%

vs. sector peers

Cheap

28.7x median of 4 peers · -39%

vs. generic bands

Fair

15x–35x

EV/EBITDA

8.8x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 14.1% to 3.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 18.2% to 5.0% — often a sign of competition or overexpansion.

Red Flags

8 items require attention · 4 high · 4 watch

🔴Debt has risen sharplyFinancial
Total debt is up 70% over 3 years, from ₹513 Cr to ₹870 Cr.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 13.7 points, from 29.0% to 15.3%.
🔴Receivables growing faster than salesFinancial
Receivables up 54% against revenue up -17% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 46% against revenue up -17% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 5.1x to 2.3x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹108 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 69% over 3 years.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.66 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 39% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 29.0% to 15.3%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 5.2x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 54% against revenue up -17%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 136% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 14.1% to 3.4%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

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

1EBITDA margin holds above 13%✓ 15.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.2x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹108 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 2.3x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 5.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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

4 good · 3 neutral · 4 weak

Market Cap

₹633 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

17.5x

Fair

Fairly valued against the generic band

P/B Ratio

0.52x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹4.14

Profitable

Profitable on a per-share basis

ROE

3.4%

Weak

Weak capital efficiency

ROCE

5.0%

Weak

Low return on total capital employed

Debt/Equity

0.71x

Moderate

Moderate leverage

Revenue Growth (YoY)

36.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-48.6%

Falling

Profits are shrinking

Dividend Yield

3.45%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

-₹108 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

7.4%

Average

Average margins

Net Margin

3.1%

Average

Average bottom-line conversion

Current Ratio

0.66

Tight

Tight short-term liquidity

Beta (vs Nifty)

0.14

Defensive

Steadier than the market

52W Range Position

16%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

77.2 / 77.1

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

28.6

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,302 Cr	₹1,206 Cr	₹1,100 Cr	₹1,085 Cr	-5.9%
EBITDA	₹378 Cr	₹352 Cr	₹250 Cr	₹166 Cr	-24.0%
EBITDA Margin	29.0%	29.2%	22.8%	15.3%	—
PAT (Net Profit)	₹136 Cr	₹184 Cr	₹115 Cr	₹42 Cr	-32.5%
EPS	₹15.6	₹21.07	₹13.2	₹4.81	-32.4%
ROE	14.1%	16.4%	9.5%	3.4%	—
ROCE	18.2%	18.1%	10.8%	5.0%	—
Total Debt	₹513 Cr	₹513 Cr	₹654 Cr	₹870 Cr	+19.3%
Free Cash Flow	₹310 Cr	₹122 Cr	-₹136 Cr	-₹108 Cr	—

🔴 Revenue has shrunk at 5.9% a year over 3 years.

🔴 EBITDA has shrunk at 24.0% a year over 3 years.

🔴 EBITDA Margin has fallen from 29.0% to 15.3% over 3 years (-13.7 pts).

🔴 PAT (Net Profit) has shrunk at 32.5% a year over 3 years.

🔴 EPS has shrunk at 32.4% a year over 3 years.

🔴 ROE has fallen from 14.1% to 3.4% over 3 years (-10.7 pts).

🔴 ROCE has fallen from 18.2% to 5.0% over 3 years (-13.2 pts).

🔴 Total Debt has grown at 19.3% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹310 Cr to -₹108 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,399 Cr

Total Liabilities

₹1,171 Cr

Cash & Equivalents

₹41 Cr

Operating Cash Flow

₹219 Cr

Capex

-₹327 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

72.6%

Corporate Actions

Dividend Rate

₹2.5

Ex-Dividend Date

20 Aug 2026

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 mixed3 negative2 general

Kuantum Papers vs Nifty 50: Share Price Performance Compared

Univest, 01 Oct

Kuantum Papers Q4 Net Profit Falls 45.2% to ₹14.3 Crore Amid Margin Compression

Sahi, 26 MayResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Kuantum Papers restarts Paper Machine-3 after major rebuild

scanx.trade, 25 Aug

Kuantum Papers standalone net profit declines 48.34% in the June 2026 quarter

Business Standard, 12 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Kuantum Papers Share Price Target 2027 to 2030: Analyst Outlook

Univest, 17 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Kuantum Papers FY26 net profit falls 63.6% on higher costs

scanx.trade, 27 MayResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

MiddlingValuation

WeakBusiness Quality · Financial Health · Growth · Profitability · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 4 high-severity red flags sit above this conclusion and should be read first.

4 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑