Star Paper Mills reports a 20.39% decline in FY26 net profit to Rs 32.75 crore, citing increased competition, rising energy costs, and higher GST rates. Despite the profit dip, the company declared a dividend of Rs 2.50 per share. Management is focusing on efficiency through a new 6.5 MV turbine and Chlorine Dioxide plant, both expected to be operational by December 2026, to navigate challenging market conditions.
Star Paper Mills Posts FY26 Profit of Rs 32.75 Crore, Declares Rs 2.50 Dividend
Turnover fell 6.05% to Rs 409.94 crore; PAT declined 20.39% to Rs 32.75 crore.
Reader Takeaway: Dividend consistency offers comfort, but margin pressure from higher costs and taxes remains a near-term headwind.
What just happened
Star Paper Mills Ltd released its annual performance review for FY 2025-26. The company reported a net profit of Rs 32.75 crore, compared to Rs 41.14 crore in the previous fiscal year. Alongside the financial results, the company announced a dividend of Rs 2.50 per share, with a record date set for September 17, 2026.
Why this matters
The company faced significant headwinds this year, including a GST hike from 12% to 18% and increased competition from imported paper under various Free Trade Agreements. Management also highlighted that the Middle East crisis disrupted supply chains and inflated energy costs, directly impacting bottom-line profitability.
Capital Projects
To counter rising operational expenses, Star Paper Mills is investing in two major projects:
- A 6.5 MV Turbine (Rs 13.30 crore) to lower energy costs.
- A Chlorine Dioxide (Clo2) plant (Rs 30.95 crore) to enhance pulp quality.
Both projects are slated for commissioning by December 2026.
Context Metrics
The company maintains a credit rating of Acuite A+ (Stable). Total turnover for the year stood at Rs 409.94 crore, reflecting the current sub-optimal market environment. The company also continues its commitment to sustainability with its social farm forestry program, which has spanned over 13,000 hectares.