The Mysore Paper Mills Reports ₹20.46 Cr Net Loss in Q3 FY26; Lease Plan Underway

The Mysore Paper Mills Limited (MPM) announced a net loss of ₹20.46 crore for the third quarter of fiscal year 2026, which ended December 31, 2025. Operating income for the period was ₹4.13 crore, while total expenses reached ₹24.59 crore. Basic Earnings Per Share (EPS) was a negative ₹1.72 for the quarter.

These results highlight the company's ongoing struggle with operational viability, a challenge that has persisted for years. In response, MPM is actively pursuing a plan to lease out its mill operations to a private entity. This move is considered a crucial step toward potentially reviving the business.

The company's financial health has long been a concern, underscored by a historical "disclaimer of opinion" from auditors for FY 2015-16, which flagged going concern issues. MPM, a state-run undertaking, was declared a sick company in 2011 and referred to the BIFR. While primary operations ceased in October 2021 due to accumulated losses, the company has continued to focus on forestry plantations, with periodic government support for maintenance. Furthermore, financial statements from April 2016 to March 2025 are still pending finalization and audit, suggesting ongoing accounting complexities.

Efforts to find a private partner to lease the mill operations have been ongoing since 2017, though multiple tenders have failed to attract bids. iDeCK has been appointed as a transaction advisor to manage this process. Additional uncertainty could arise from legal challenges filed by labour unions concerning mill closure orders.

Key risks include the persistent auditor's disclaimer regarding going concern issues, the fundamental unsustainability of current operations due to continuous losses, and the potential impact of ongoing legal challenges from labour unions. The pending finalization and audit of financial statements for several years could also uncover further complications. The company's financial stability is further indicated by an Altman Z-score of -2.11, suggesting a high risk to solvency.

MPM operates within the Indian paper industry alongside companies such as JK Paper Ltd., West Coast Paper Mills Ltd., Andhra Paper Ltd., and Tamil Nadu Newsprint & Papers Ltd. These peers generally show stronger financial health and operational continuity, contrasting sharply with MPM's challenges. For example, JK Paper and West Coast Paper possess significantly higher market capitalizations and positive profitability.

Investors and observers will be tracking the progress of the lease plan, developments in the labour union's legal challenge, and the completion of pending financial audits. Any further government support measures will also be a key point of attention.