The South India Paper Mills Limited

Basic Materials — Paper & Paper Products · BSE

₹117.90₹0.00 (0.00%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 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 The South India 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?

The South India Paper Mills Limited manufactures and sells paper, paperboards, and cartons in India.

IndustryPaper & Paper Products

SectorBasic Materials

Employees344

Annual revenue₹433 Cr

How does it make money?

Turns over ₹433 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 344 employees supports ₹1.26 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin11.6%

Net margin2.5%

Revenue / employee₹1.26 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.

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?Little sign of one

Returns on capital of 10.4% 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.

ROCE10.4%

ROE4.8%

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 +51% while net margin moved -143% 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+51%

Margin effect-143%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of 0.02 — 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

58/ 100

Average

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

Valuation

80/ 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

15.0x

Sector Median

28.7x

median of 4 sector peers

🟢Against its sector it trades 48% 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 · -48%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

15.0x

P/B

0.99x

EV/EBITDA

7.4x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from -1.9% to 11.6% over 3 years.
Debt is being paid down
Total debt is down 19% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from -7.1% to 4.8%.
Return on capital is rising
ROCE has improved from -2.2% to 10.4%.

🔴 What Needs Attention1

Receivables growing faster than sales
Receivables are up 74% against revenue growth of 51% — customers are taking longer to pay.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.7x — little room if earnings dip.
🟡Receivables growing faster than salesFinancial
Receivables up 74% against revenue up 51% — 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 -1.9% to 11.6%. 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 19% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 48% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.1x 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 74% against revenue up 51%. 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.

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

1Revenue growth stays above 11% a year✓ 14.7% CAGR
Latest reported year was 10.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 10%✓ 11.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.1x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Interest cover stays above 3x✗ 1.7x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹39 Cr
Profit that never becomes cash eventually stops being profit.

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

5 good · 5 neutral · 1 weak

Market Cap

₹221 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.0x

Fair

Fairly valued against the generic band

P/B Ratio

0.99x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹7.85

Profitable

Profitable on a per-share basis

ROE

4.8%

Weak

Weak capital efficiency

ROCE

10.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.70x

Moderate

Moderate leverage

Revenue Growth (YoY)

10.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

409.6%

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

₹39 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹117.9

Operating Margin

9.4%

Average

Average margins

Net Margin

3.3%

Average

Average bottom-line conversion

Current Ratio

1.14

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.02

Defensive

Steadier than the market

52W Range Position

72%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

117.2 / 115.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

57.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹287 Cr	₹311 Cr	₹369 Cr	₹433 Cr	+14.7%
EBITDA	-₹6 Cr	₹17 Cr	₹21 Cr	₹50 Cr	—
EBITDA Margin	-1.9%	5.6%	5.8%	11.6%	—
PAT (Net Profit)	-₹17 Cr	-₹13 Cr	-₹10 Cr	₹11 Cr	—
EPS	₹-11.08	₹-7.16	₹-5.14	₹5.73	—
ROE	-7.1%	-6.1%	-4.6%	4.8%	—
ROCE	-2.2%	-0.1%	2.0%	10.4%	—
Total Debt	₹192 Cr	₹198 Cr	₹175 Cr	₹156 Cr	-6.7%
Free Cash Flow	-₹26 Cr	-₹22 Cr	₹38 Cr	₹39 Cr	—

🟢 Revenue has grown at 14.7% a year over 3 years.

🟢 EBITDA has turned positive, from -₹6 Cr to ₹50 Cr.

🟢 EBITDA Margin has risen from -1.9% to 11.6% over 3 years (+13.5 pts).

🟢 PAT (Net Profit) has turned positive, from -₹17 Cr to ₹11 Cr.

🟢 EPS has turned positive, from ₹-11.08 to ₹5.73.

🟢 ROE has risen from -7.1% to 4.8% over 3 years (+12.0 pts).

🟢 ROCE has risen from -2.2% to 10.4% over 3 years (+12.6 pts).

🟢 Total Debt has shrunk at 6.7% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹26 Cr to ₹39 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹449 Cr

Total Liabilities

₹226 Cr

Total Debt

₹156 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹43 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

76.2%

Corporate Actions

Ex-Dividend Date

29 Aug 2022

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

South India Paper Mills board recommends Modi family open offer at ₹120

scanx.trade, 17 Oct

South India Paper Mills Share Price News and Valuation View

Univest, 25 Aug

South India Paper Mills Ltd is Rated Hold by MarketsMOJO

MarketsMojo, 17 Oct

South (I) Paper Standalone June 2026 Net Sales at Rs 117.58 crore, up 10.01% Y-o-Y

Moneycontrol.com, 07 Aug

Modi group files detailed public statement for South India Paper Mills open offer

scanx.trade, 19 Aug

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

Univest, 15 Oct

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate10.2/20

🟡Financial HealthAdequate12.7/20

🟢GrowthStrong13.6/20

🟡ProfitabilityModerate7.1/15

🟢ValuationAttractive11.3/15

🔴RiskHigh4.4/10

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. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 11% a year14.7% CAGR
✓EBITDA margin holds above 10%11.6%
✗Debt / EBITDA falls below 3x3.1x
✗Interest cover stays above 3x1.7x
✓Free cash flow remains positive₹39 Cr