Shree Ajit Pulp and Paper Limited

Basic Materials — Paper & Paper Products · NSE

₹334.70−₹5.95 (−1.75%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by moderate debt load, micro-cap size, which brings thin liquidity.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:45 pm

Understanding the Business

Company site ↗

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

What does this company do?

Shree Ajit Pulp and Paper Limited manufactures and sells kraft paper in India.

IndustryPaper & Paper Products

SectorBasic Materials

Employees396

Annual revenue₹700 Cr

How does it make money?

Turns over ₹700 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 396 employees supports ₹1.77 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.77 Cr

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 13.7% 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?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +89% while net margin moved -23% 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+89%

Margin effect-23%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.15 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

60/ 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

7.2x

Sector Median

28.7x

median of 4 sector peers

🟢Against its sector it trades 75% below the peer median of 28.7x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

28.7x median of 4 peers · -75%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

6.1x

PEG

0.54

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 9.6% to 13.0% 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 7.8% to 13.7%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 51% over 3 years, from ₹169 Cr to ₹256 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 140% against revenue up 89% — 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 9.6% to 13.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 75% 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?

Sales are being booked faster than collected
Receivables are up 140% against revenue up 89%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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 18% a year✓ 23.6% CAGR
Latest reported year was 13.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 11%✓ 13.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Interest cover stays above 3x✗ 2.5x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹58 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

7 / 10 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

Price history

Quick Metrics

6 good · 5 neutral · 0 weak

Market Cap

₹298 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.2x

Cheap

Cheap against the generic band

P/B Ratio

1.07x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹46.67

Profitable

Profitable on a per-share basis

ROE

10.8%

Moderate

Moderate capital efficiency

ROCE

13.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.92x

Moderate

Moderate leverage

Revenue Growth (YoY)

13.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

162.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

₹58 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

15.9%

Good

Healthy core-business profitability

Net Margin

5.7%

Average

Average bottom-line conversion

Current Ratio

2.18

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.15

Defensive

Steadier than the market

52W Range Position

61%

Mid-range

Technical Snapshot

RSI (14)

65.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹371 Cr	₹294 Cr	₹505 Cr	₹700 Cr	+23.6%
EBITDA	₹36 Cr	₹21 Cr	₹52 Cr	₹91 Cr	+36.4%
EBITDA Margin	9.6%	7.1%	10.3%	13.0%	—
PAT (Net Profit)	₹21 Cr	₹8 Cr	₹9 Cr	₹30 Cr	+13.2%
EPS	₹26.13	₹10.03	₹11.31	₹33.78	+8.9%
ROE	10.0%	3.6%	3.8%	10.8%	—
ROCE	7.8%	4.3%	7.8%	13.7%	—
Total Debt	₹169 Cr	₹226 Cr	₹285 Cr	₹256 Cr	+14.8%
Free Cash Flow	-₹141 Cr	-₹78 Cr	-₹39 Cr	₹58 Cr	—

🟢 Revenue has grown at 23.6% a year over 3 years.

🟢 EBITDA has grown at 36.4% a year over 3 years.

🟢 EBITDA Margin has risen from 9.6% to 13.0% over 3 years (+3.3 pts).

🟢 PAT (Net Profit) has grown at 13.2% a year over 3 years.

🟢 EPS has grown at 8.9% a year over 3 years.

🟡 ROE has held roughly flat at 10.8% over 3 years.

🟢 ROCE has risen from 7.8% to 13.7% over 3 years (+5.9 pts).

🔴 Total Debt has grown at 14.8% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹141 Cr to ₹58 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹616 Cr

Total Liabilities

₹338 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹63 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

84.7%

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

Shree Ajit Pulp & Paper Share Price and valuation update

Univest, 13 Oct

Shree Ajit Pulp and Paper: पूर परिस्थितीनंतर युनिट १ मध्ये उत्पादन सुरू, गुंतवणूकदारांना मोठा दिलासा

Whalesbook, 12 Oct

Shree Ajit Pulp resumes Unit 1 operations on trial basis after floods

scanx.trade, 12 Oct

Shree Ajit Pulp & Paper Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Shree Ajit Pulp and Paper consolidated net profit rises 162.23% in the June 2026 quarter

Business Standard, 15 AugResults

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

Shree Ajit Pulp suspends operations after factory floods

scanx.trade, 24 Jul

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingBusiness Quality · Growth · Profitability

WeakRisk

Points for each in the Score ↑

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. 2 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Interest cover stays above 3x · see Key things to watch ↑