Tamil Nadu Newsprint and Papers Limited

Basic Materials — Paper & Paper Products · NSE

₹139.59+₹1.33 (+0.96%)

DalalBaazaar Score

42 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by short-term liabilities exceed short-term assets, 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 modest growth. Short-term liquidity is the main factor to watch.

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 Tamil Nadu Newsprint and Papers Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Tamil Nadu Newsprint and Papers Limited manufactures and markets paper and paperboards in India and internationally. It operates in the Paper & Paper Board and Energy segments.

IndustryPaper & Paper Products

SectorBasic Materials

Employees2,757

Annual revenue₹4,582 Cr

How does it make money?

Turns over ₹4,582 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 2,757 employees supports ₹1.66 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin11.8%

Net margin5.4%

Revenue / employee₹1.66 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 6.3% 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.

ROCE6.3%

ROE10.7%

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 -29% 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-29%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 3.6% a year
✗ Profit has declined at 13.9% a year

Quality vs. Valuation

Company Quality

34/ 100

Weak

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

Valuation

87/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

3.7x

3Y Median

5.6x

40 monthly readings · mean 84.7x · range 3.9x–300.8x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 34% below its 3y median of 5.6x. 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 87% below the peer median of 28.7x.

vs. its own history

Cheap

5.6x median over 40 months · -34%

vs. sector peers

Cheap

28.7x median of 4 peers · -87%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

3.7x

P/B

0.42x

EV/EBITDA

4.8x

PEG

—

Dividend Yield

2.87%

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 14% over 3 years.
Valuation below its historical average
At 3.7x the stock trades 34% below its own median of 5.6x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Margins are compressing
EBITDA margin has slipped from 20.3% to 11.8% over 3 years.
Return on equity is falling
ROE has dropped from 20.0% to 10.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 21.6% to 6.3% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 86% against revenue growth of -10% — customers are taking longer to pay.
Short-term liquidity is tight
Current ratio of 0.69 — near-term obligations exceed near-term assets.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.3x — little room if earnings dip.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 8.5 points, from 20.3% to 11.8%.
🔴Receivables growing faster than salesFinancial
Receivables up 86% against revenue up -10% — sales are being booked faster than they are collected.
🟡Profit is decliningFinancial
Net profit is down 36% over 3 years.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.69 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 34% 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 87% 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 20.3% to 11.8%. 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 86% 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.
Returns on shareholder capital are falling
ROE has dropped from 20.0% to 10.7%. 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.
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

1EBITDA margin holds above 10%✓ 11.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 3.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Interest cover stays above 3x✗ 1.3x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹199 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✗ 6.3%
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

₹966 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

3.7x

Cheap

Cheap against the generic band

P/B Ratio

0.42x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹37.7

Profitable

Profitable on a per-share basis

ROE

10.7%

Moderate

Moderate capital efficiency

ROCE

6.3%

Weak

Low return on total capital employed

Debt/Equity

0.70x

Moderate

Moderate leverage

Revenue Growth (YoY)

0.4%

Modest

Modest growth

Profit Growth (YoY)

6551.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

2.87%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹199 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹139.59

P/E (Forward)

3.8x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

3.2%

Weak

Thin margins leave little room for error

Net Margin

5.6%

Average

Average bottom-line conversion

Current Ratio

0.69

Tight

Tight short-term liquidity

Beta (vs Nifty)

0.00

Defensive

Steadier than the market

52W Range Position

40%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

144.8 / 146.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

31.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹5,117 Cr	₹4,643 Cr	₹4,443 Cr	₹4,582 Cr	-3.6%
EBITDA	₹1,039 Cr	₹807 Cr	₹489 Cr	₹540 Cr	-19.6%
EBITDA Margin	20.3%	17.4%	11.0%	11.8%	—
PAT (Net Profit)	₹388 Cr	₹208 Cr	₹4 Cr	₹248 Cr	-13.9%
EPS	₹56.04	₹30.08	₹0.54	₹35.8	-13.9%
ROE	20.0%	10.0%	0.2%	10.7%	—
ROCE	21.6%	14.4%	5.6%	6.3%	—
Total Debt	₹1,871 Cr	₹1,801 Cr	₹1,604 Cr	₹1,613 Cr	-4.8%
Free Cash Flow	₹699 Cr	₹277 Cr	₹396 Cr	₹199 Cr	-34.2%

🔴 Revenue has shrunk at 3.6% a year over 3 years.

🔴 EBITDA has shrunk at 19.6% a year over 3 years.

🔴 EBITDA Margin has fallen from 20.3% to 11.8% over 3 years (-8.5 pts).

🔴 PAT (Net Profit) has shrunk at 13.9% a year over 3 years.

🔴 EPS has shrunk at 13.9% a year over 3 years.

🔴 ROE has fallen from 20.0% to 10.7% over 3 years (-9.3 pts).

🔴 ROCE has fallen from 21.6% to 6.3% over 3 years (-15.3 pts).

🟢 Total Debt has shrunk at 4.8% a year over 3 years.

🔴 Free Cash Flow has shrunk at 34.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹6,210 Cr

Total Liabilities

₹3,894 Cr

Total Debt

₹1,613 Cr

Cash & Equivalents

₹14 Cr

Operating Cash Flow

₹596 Cr

Capex

-₹397 Cr

Shareholding (proxy)

Institutional Holding

6.7%

Insider Holding

49.4%

Corporate Actions

Dividend Rate

₹4

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

1 positive1 mixed4 general

Tamilnadu Newsprint & Papers Share Price

Upstox, 16 Oct

Tamil Nadu Newsprint and Papers vs Nifty 50 Return Comparison

Univest, 12 Oct

Tamil Nadu Newsprint and Papers (NSE:TNPL) Could Be A Buy For Its Upcoming Dividend

Simply Wall Street, 13 SeptCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Tamil Nadu Newsprint And Papers Ltd. Share Price Live Today

CNBC TV18, 03 Jan

Tamil Nadu Newsprint and Papers Share Price Target 2026: Rs 175 Analyst Forecast

Univest, 26 JunAnalyst view

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

TNPL appoints A John Moris & Co as statutory auditors for FY27

scanx.trade, 24 Sept

Watch Items

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

DalalBaazaar Thesis

🔴Business QualityWeak5.9/20

🟡Financial HealthAdequate9.8/20

🔴GrowthWeak2.4/20

🟡ProfitabilityModerate7.1/15

🟢ValuationAttractive12.8/15

🔴RiskHigh4.4/10

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 10%11.8%
✗Debt / EBITDA stays below 2x3.0x
✗Interest cover stays above 3x1.3x
✓Free cash flow remains positive₹199 Cr
✗ROCE stays above 8%6.3%