Any current/future new fundraising through debt or equity?

Kuantum Papers Limited plans to fund its ongoing and upcoming capacity expansion through a mix of bank debt and internal accruals. The company has already applied for a bank loan of INR 535 crores. The balance INR 200 crores of the INR 735 crores revised CAPEX cost will be funded from internal accruals. No mention was made regarding any equity fundraising in the current or future plans disclosed in the call.

Any current/future capex/capital investment/strategic investment?

**Revised Capex Project:** Rs. 735 crores approved, up from initial Rs. 285 crores. **Purpose:** Upgradation and modification of existing paper machines focusing on environmental sustainability. **Capacity Increase:** Aims for a 50% boost in production capacity from 450 tons per day to 675 tons per day. **Upgrades:** - PM1 rebuilt (new headbox, wire parts, press part, pope reel, added dryers), increasing production from 25 to 40 tons. - TG4 turbine upgraded from 10 MW to 13.5 MW for better steam efficiency and lower costs. - Procurement of Bellmer shoe press for PM4. - DBS equipment or

Future growth expectations in sales/revenue/volumes?

Kuantum Papers is undertaking a major capacity expansion to increase production by about 50% from 450 tons/day to 675 tons/day, targeted mostly by March 2025, with full completion by March 2026. Specialty paper production expected to grow from 20% to 30% of total capacity, reaching about 300-350 tons/day within three years. Revenue contribution from specialty paper anticipated to rise from 20% to 30%. The company expects stable to improving realizations, supported by specialty papers which have 5-8% higher pricing and Rs. 4,000-5,000 per ton better margins. Volumes to see marginal grow

Future growth expectations in earnings/operating earnings/profits/EPS?

Kuantum Papers targets better EBITDA margins in FY 2025-26 due to improved operational efficiencies and capacity expansion. A 50% production capacity increase is expected by March 2025, with full effects visible in FY 2025-26 and FY 2026-27. Specialty paper production aims to grow from 20% to 30% of total capacity, increasing volumes from ~200 tons/day to 300-350 tons/day in 3 years, supporting higher revenue and margins. EBITDA per ton has stabilized around Rs. 19,000-20,000 with expectations to improve through cost efficiencies and scale economies. Current capacity utilization is above 90%,

Current/ Expected Orderbook/ Pending Orders?

The new education policy (NEP) has not been fully implemented yet; only up to standard three, with standards four and above pending, so no significant uplift in orders from NEP currently. Ongoing demand exists due to market conditions and the company continues to collect orders in advance to keep machines running. There are clear opportunities arising from the single-use plastic ban, with new product profiles being developed to meet this demand. Specialty paper capacity upgrades (PM1 & PM2) will support the fulfillment of these orders over the next year. No specific numeric quantification of t

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Kuantum Papers LtdQ4 FY25Paper, Forest & Jute Products

Kuantum Papers Ltd Q4 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹75.6P/E: 12.7Market Cap: ₹683 CrSector: Paper, Forest & Jute Products

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

Capex

Yes

2 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→Kuantum Papers is undertaking a major capacity expansion to increase production by about 50% from 450 tons/day to 675 tons/day, targeted mostly by March 2025, with full completion by March 2026.
→Specialty paper production expected to grow from 20% to 30% of total capacity, reaching about 300-350 tons/day within three years.
→Revenue contribution from specialty paper anticipated to rise from 20% to 30%.
→The company expects stable to improving realizations, supported by specialty papers which have 5-8% higher pricing and Rs. 4,000-5,000 per ton better margins.
→Volumes to see marginal growth in FY25 due to current near 90% capacity utilization, with significant growth (approx. 60%) materializing in FY26 and the remaining 40% in FY27.
→Enhanced operational efficiencies and cost management expected to improve EBITDA margins and profitability going forward.

Margin guidance

Category 3

→Kuantum Papers targets better EBITDA margins in FY 2025-26 due to improved operational efficiencies and capacity expansion.
→A 50% production capacity increase is expected by March 2025, with full effects visible in FY 2025-26 and FY 2026-27.
→Specialty paper production aims to grow from 20% to 30% of total capacity, increasing volumes from ~200 tons/day to 300-350 tons/day in 3 years, supporting higher revenue and margins.
→EBITDA per ton has stabilized around Rs. 19,000-20,000 with expectations to improve through cost efficiencies and scale economies.
→Current capacity utilization is above 90%, indicating scope for volume growth primarily with new capacity addition.
→Profitability is projected to improve modestly in FY 25, with substantial volume and profit growth expected in FY 26 and FY 27 as new capacity comes online.

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Fundraise plans

Yes

→Kuantum Papers Limited plans to fund its ongoing and upcoming capacity expansion through a mix of bank debt and internal accruals.
→The company has already applied for a bank loan of INR 535 crores.
→The balance INR 200 crores of the INR 735 crores revised CAPEX cost will be funded from internal accruals.
→No mention was made regarding any equity fundraising in the current or future plans disclosed in the call.

Order book

→The new education policy (NEP) has not been fully implemented yet; only up to standard three, with standards four and above pending, so no significant uplift in orders from NEP currently.
→Ongoing demand exists due to market conditions and the company continues to collect orders in advance to keep machines running.
→There are clear opportunities arising from the single-use plastic ban, with new product profiles being developed to meet this demand.
→Specialty paper capacity upgrades (PM1 & PM2) will support the fulfillment of these orders over the next year.
→No specific numeric quantification of the current order book is provided in the transcript, but management indicates healthy ongoing order flows aligned with capacity expansions.

Capex plans

Yes

→**Revised Capex Project:** Rs. 735 crores approved, up from initial Rs. 285 crores.
→**Purpose:** Upgradation and modification of existing paper machines focusing on environmental sustainability.
→**Capacity Increase:** Aims for a 50% boost in production capacity from 450 tons per day to 675 tons per day.
→**Upgrades:**
→ - PM1 rebuilt (new headbox, wire parts, press part, pope reel, added dryers), increasing production from 25 to 40 tons.
→ - TG4 turbine upgraded from 10 MW to 13.5 MW for better steam efficiency and lower costs.
→ - Procurement of Bellmer shoe press for PM4.
→ - DBS equipment ordered for pulp mill to improve production and pulp yield with lower steam use.
→**Sapling Production:** Plan to produce 20 million clonal saplings by FY 2025.
→**Timeline:** Majority of production capacity increase to complete by March 2025; remaining projects up to March 2026.
→**Funding:** Combination of bank debt (approx. Rs. 535 crores) and internal accruals (approx. Rs. 200 crores).

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