Star Paper Mills Limited

Basic Materials — Paper & Paper Products · NSE

₹166.95+₹0.67 (+0.40%)

DalalBaazaar Score

45 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, falling profits.

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. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

The 60-second version of Star 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?

Star Paper Mills Limited manufactures and supplies paper, and paper boards and other related products in India and internationally. The company provides a range of industrial packaging and cultural papers, as well as other grades to the consumers in various segments.

IndustryPaper & Paper Products

SectorBasic Materials

Employees371

Annual revenue₹405 Cr

How does it make money?

Turns over ₹405 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 371 employees supports ₹1.09 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.09 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 4.5% 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 -16% while net margin moved -41% 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-16%

Margin effect-41%

DalalBaazaar Score

45/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 5.7% a year
✗ Profit has declined at 20.7% a year
✗ Profit fell 14.1% in the latest year

Quality vs. Valuation

Company Quality

38/ 100

Weak

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

Valuation

64/ 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

8.4x

3Y Median

5.3x

40 monthly readings · mean 5.5x · range 3.8x–8.0x

Sector Median

28.7x

median of 4 sector peers

⚠️Current valuation is approximately 58% above its 3y median of 5.3x. 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 71% below the peer median of 28.7x.

vs. its own history

Expensive

5.3x median over 40 months · +58%

vs. sector peers

Cheap

28.7x median of 4 peers · -71%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

10.7x

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 11.0% to 4.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 12.5% to 4.5% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 3076% over 3 years, from ₹0 Cr to ₹4 Cr.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 13.7 points, from 19.6% to 5.9%.
🔴Receivables growing faster than salesFinancial
Receivables up 165% against revenue up -16% — sales are being booked faster than they are collected.
🟡Profit is decliningFinancial
Net profit is down 50% over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 23% against revenue up -16% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 71% 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 19.6% to 5.9%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 165% against revenue up -16%. 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 58% 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 11.0% to 4.6%. 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.
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.

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

1EBITDA margin holds above 4%✓ 5.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹20 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 4.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 5.3x✗ 8.4x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 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 · 4 neutral · 3 weak

Market Cap

₹261 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.4x

Cheap

Cheap against the generic band

P/B Ratio

0.37x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹19.82

Profitable

Profitable on a per-share basis

ROE

4.6%

Weak

Weak capital efficiency

ROCE

4.5%

Weak

Low return on total capital employed

Debt/Equity

0.61x

Moderate

Moderate leverage

Revenue Growth (YoY)

2.3%

Modest

Modest growth

Profit Growth (YoY)

-14.1%

Falling

Profits are shrinking

Dividend Yield

1.50%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹20 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

4.0x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

1.0%

Weak

Thin margins leave little room for error

Net Margin

7.4%

Average

Average bottom-line conversion

Current Ratio

7.90

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.10

Defensive

Steadier than the market

52W Range Position

87%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

155.6 / 154.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

63.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹483 Cr	₹444 Cr	₹432 Cr	₹405 Cr	-5.7%
EBITDA	₹95 Cr	₹68 Cr	₹42 Cr	₹24 Cr	-36.9%
EBITDA Margin	19.6%	15.3%	9.7%	5.9%	—
PAT (Net Profit)	₹66 Cr	₹64 Cr	₹41 Cr	₹33 Cr	-20.7%
EPS	₹42.08	₹41.01	₹26.36	₹20.98	-20.7%
ROE	11.0%	9.9%	6.0%	4.6%	—
ROCE	12.5%	11.1%	7.1%	4.5%	—
Total Debt	₹0 Cr	₹5 Cr	₹5 Cr	₹4 Cr	+216.7%
Free Cash Flow	₹42 Cr	₹15 Cr	₹11 Cr	₹20 Cr	-21.4%

🔴 Revenue has shrunk at 5.7% a year over 3 years.

🔴 EBITDA has shrunk at 36.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 19.6% to 5.9% over 3 years (-13.7 pts).

🔴 PAT (Net Profit) has shrunk at 20.7% a year over 3 years.

🔴 EPS has shrunk at 20.7% a year over 3 years.

🔴 ROE has fallen from 11.0% to 4.6% over 3 years (-6.4 pts).

🔴 ROCE has fallen from 12.5% to 4.5% over 3 years (-8.0 pts).

🔴 Total Debt has grown at 216.7% a year over 3 years.

🔴 Free Cash Flow has shrunk at 21.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹838 Cr

Total Liabilities

₹129 Cr

Cash & Equivalents

₹9 Cr

Operating Cash Flow

₹29 Cr

Capex

-₹9 Cr

Shareholding (proxy)

Institutional Holding

1.6%

Insider Holding

63.9%

Corporate Actions

Dividend Rate

₹2.5

Ex-Dividend Date

17 Sept 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

2 mixed4 general

Star Paper Mills Share Price near 52-week high, valuation

Univest, 15 Oct

Star Paper Mills (STARPAPER.NS) Climbs 4.99% to ₹169.8, Pressing Against ₹178 Resistance - High Low Breadth

https://www.siam.in/, 15 Oct

Star Paper Mills Secures ₹50 Crore Working Capital Facility From UCO Bank; Shares Fall 1.08%

HDFC Sky, 11 SeptPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Star Paper Mills vs Nifty 50: 1Y Return -5.09% vs -9.64%

Univest, 14 Oct

Why Star Paper Mills' (NSE:STARPAPER) Shaky Earnings Are Just The Beginning Of Its Problems

Simply Wall Street, 03 JunResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Star Paper Mills Ltd. Peer Comparison – Compare with Others

Value Research, 14 Sept

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingRisk

WeakBusiness Quality · Growth · Profitability

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

2 of 5 tripwires tripped — ROCE stays above 8%; Valuation vs its own median of 5.3x · see Key things to watch ↑