Mohit Paper Mills Limited

Basic Materials — Paper & Paper Products · BSE

₹27.00−₹0.08 (−0.30%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, 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. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Mohit Paper Mills Limited engages in the manufacturing of writing, printing, and tissue papers in India and internationally.

IndustryPaper & Paper Products

SectorBasic Materials

Employees430

Annual revenue₹200 Cr

How does it make money?

Turns over ₹200 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 430 employees supports ₹46.6 lakh of revenue a year, the signature of a people-led business.

EBITDA margin11.7%

Net margin3.3%

Revenue / employee₹46.6 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.

TATA STEEL LIMITEDP/E 19.8x · ROE 10.8%

JSW STEEL LIMITEDP/E 12.0x · ROE 24.7%

ULTRATECH CEMENT LIMITEDP/E 37.6x · ROE 11.1%

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

What is its competitive advantage?Some evidence

ROCE of 16.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE16.5%

ROE11.5%

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 -10% while net margin moved +50% 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-10%

Margin effect+50%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 3.4% a year
• Profit CAGR of 10.5%
✗ Profit fell 12.7% in the latest year

Quality vs. Valuation

Company Quality

47/ 100

Average

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 reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

5.5x

3Y Median

7.0x

40 monthly readings · mean 7.3x · range 5.5x–12.3x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 21% below its 3y median of 7.0x. 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 81% below the peer median of 28.7x.

vs. its own history

Cheap

7.0x median over 40 months · -21%

vs. sector peers

Cheap

28.7x median of 4 peers · -81%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

5.5x

P/B

0.66x

EV/EBITDA

5.0x

PEG

0.53

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 7.2% to 11.7% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on capital is rising
ROCE has improved from 12.0% to 16.5%.
Valuation below its historical average
At 5.5x the stock trades 21% below its own median of 7.0x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Debt is rising
Total debt is up 68% over 3 years — worth checking what it funded.
Receivables growing faster than sales
Receivables are up 36% against revenue growth of -10% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 147% against revenue growth of -10% — stock may not be moving.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 68% over 3 years, from ₹48 Cr to ₹80 Cr.
🔴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 147% against revenue up -10% — stock may not be moving.
🟡Receivables growing faster than salesFinancial
Receivables up 36% against revenue up -10% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 7.2% to 11.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 21% 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 81% 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?

The debt load needs earnings to hold up
Debt is 3.4x 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 36% against revenue up -10%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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
3 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

1EBITDA margin holds above 10%✓ 11.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 2.5x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹4 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 13%✓ 16.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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

6 good · 4 neutral · 1 weak

Market Cap

₹38 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

5.5x

Cheap

Cheap against the generic band

P/B Ratio

0.66x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹4.87

Profitable

Profitable on a per-share basis

ROE

11.5%

Moderate

Moderate capital efficiency

ROCE

16.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.28x

Moderate

Moderate leverage

Revenue Growth (YoY)

18.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-12.7%

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

₹4 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹27

Operating Margin

5.8%

Average

Average margins

Net Margin

3.1%

Average

Average bottom-line conversion

Current Ratio

1.02

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.35

Defensive

Steadier than the market

52W Range Position

22%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

26.0 / 26.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

57.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹222 Cr	₹186 Cr	₹180 Cr	₹200 Cr	-3.4%
EBITDA	₹16 Cr	₹19 Cr	₹25 Cr	₹23 Cr	+13.2%
EBITDA Margin	7.2%	10.1%	13.7%	11.7%	—
PAT (Net Profit)	₹5 Cr	₹6 Cr	₹7 Cr	₹7 Cr	+10.5%
EPS	₹3.51	₹4.61	₹4.65	₹4.74	+10.5%
ROE	12.9%	14.5%	12.7%	11.5%	—
ROCE	12.0%	11.6%	14.6%	16.5%	—
Total Debt	₹48 Cr	₹81 Cr	₹85 Cr	₹80 Cr	+19.0%
Free Cash Flow	-₹5 Cr	-₹27 Cr	-₹19 Cr	₹4 Cr	—

🔴 Revenue has shrunk at 3.4% a year over 3 years.

🟢 EBITDA has grown at 13.2% a year over 3 years.

🟢 EBITDA Margin has risen from 7.2% to 11.7% over 3 years (+4.4 pts).

🟢 PAT (Net Profit) has grown at 10.5% a year over 3 years.

🟢 EPS has grown at 10.5% a year over 3 years.

🔴 ROE has fallen from 12.9% to 11.5% over 3 years (-1.4 pts).

🟢 ROCE has risen from 12.0% to 16.5% over 3 years (+4.4 pts).

🔴 Total Debt has grown at 19.0% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹5 Cr to ₹4 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹197 Cr

Total Liabilities

₹140 Cr

Total Debt

₹80 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹11 Cr

Capex

-₹7 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

74.0%

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

6 general

Mohit Paper Mills Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 01 Sept

Mohit Paper Mills Limited Submits Q4FY26 Depository Compliance Certificate

scanx.trade, 09 Apr

Mohit Paper Mills Limited Publishes Advertisement for Special Securities Transfer Window

scanx.trade, 15 Apr

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TradingView, 23 Sept

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Livemint, 14 Aug

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Simply Wall Street, 07 Feb

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate11.5/20

🟡Financial HealthAdequate9.6/20

🔴GrowthWeak7.8/20

🔴ProfitabilityWeak6.5/15

🟢ValuationAttractive13.2/15

🟡RiskModerate6.2/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 10%11.7%
✗Debt / EBITDA falls below 3x3.4x
✗Interest cover stays above 3x2.5x
✓Free cash flow remains positive₹4 Cr
✓ROCE stays above 13%16.5%