West Coast Paper Mills reported a sharp increase in Q2 net profit to Rs 111.94 crore, compared to Rs 11.91 crore in the year-ago period. The company also announced a strategic Rs 290 crore expansion into its optical fiber and cable division, targeting growth in data center and telecom demand by FY2029.
West Coast Paper Mills Posts Strong Q2 Performance
Net profit soared to Rs 111.94 crore from Rs 11.91 crore; Rs 290 crore capital expenditure approved.
Reader Takeaway: Strong earnings boost investor sentiment, but the ongoing environmental legal dispute in subsidiary APL remains a key monitorable.
What just happened
West Coast Paper Mills released its Q2 FY2027 results, showing significant year-over-year growth in both income and profitability. Total consolidated income rose to Rs 1,306.29 crore, up from Rs 1,086.57 crore in the same quarter last year. Alongside the financial results, the Board of Directors approved a major expansion project for its 'West Coast Optilinks' division.
Why this matters
The company is pivoting to capture demand from AI infrastructure and telecom modernization. The Rs 290 crore investment will double optical fiber capacity to 8.0 Mn fkm per annum and increase optical fiber cable capacity to 7.3 Mn fkm per annum. Completion is slated for the third quarter of FY 2028-29.
Risks to watch
Andhra Paper Limited (APL), a subsidiary of the company, faces an environmental penalty of Rs 21.02 crore imposed by the Andhra Pradesh Pollution Control Board. The company has appealed the order at the National Green Tribunal. While management currently does not anticipate a material outflow, legal outcomes are inherently uncertain.
Context metrics
- EPS: Reported at Rs 16.77 for the quarter.
- Funding: Expansion will be financed through a combination of internal accruals and debt.
What to track next
Investors should monitor the execution timeline of the Optilinks expansion and the progress of the legal appeal at the National Green Tribunal regarding the APL environmental fine.