Kuantum Papers Plans 735 Cr Capex, Targets 1800 Cr FY27 Revenue

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AuthorAditi Singh|Published at:
Kuantum Papers Plans 735 Cr Capex, Targets 1800 Cr FY27 Revenue
Overview

Kuantum Papers reported Q3 FY26 results with 4% sequential revenue growth to INR 290 Crores and a 14% QoQ EBITDA increase to INR 39 Crores, boosting margins. The company outlined a significant INR 735 Crore capex plan for capacity expansion, including upgrades to PM 2 and PM 3. Management targets an annualized revenue run rate of INR 1,800 Crores and INR 300 Crores EBITDA by FY27, signaling aggressive growth ambitions amidst industry revival expectations.

📉 The Financial Deep Dive

Kuantum Papers Limited's Q3 FY26 earnings call revealed a focused effort on operational improvement and aggressive expansion. The company posted operational income of INR 290 Crores, a 4% sequential increase driven by a 1,701-ton rise in production volumes over the previous quarter. Cost per ton remained stable, a positive sign for margin control.

Profitability showed marked improvement. EBITDA grew by 14% quarter-on-quarter to INR 39 Crores, with the EBITDA margin expanding by 125 basis points to 13.55%. Profit After Tax (PAT) stood at INR 10 Crores, with PAT margins improving by 131 basis points sequentially to 3.38%. Paper prices saw a modest sequential increase of approximately INR 850 per ton, contributing to the revenue uplift.

🚀 Strategy & Outlook

Management is banking on an industry revival, citing supportive policy measures such as duty waivers on pulp/wastepaper from the Union Budget 2026 and potential cost relief from moderating wood prices. The India-EU free trade agreement is also seen as beneficial for exports and easing machinery imports.

Operational Upgrades & Expansion:

  • Paper Machine 1 rebuild completed, increasing daily capacity to 80 metric tons.

  • Precipitated Calcium Carbonate (PCC) capacity has been doubled to 50,000 tons per annum.

  • Record production levels were achieved on PM 4 (8,758 MT) and PM 1 (91.4 MT) in December 2025.

  • New products were launched: Kuantum Kopio (copier brand) and Kuantum Pura (utilizing 65% Argo Pulp).

  • Project Nirmaan (Industry 4.0) is progressing, incorporating advanced process control.

  • Plant utilization is near 100%.

Future Investments:
Significant capital expenditure is planned: INR 45 Crores for PM 2 upgrade (Feb 2026, ~30-day shutdown) and INR 140 Crores for PM 3 upgrade (May 2026, ~45-day shutdown). This is part of a larger INR 735 Crores expansion plan.

Financial Targets:
The company has set ambitious targets: a top line of INR 1,100 Crores for FY26 and an annualized run rate of INR 1,800 Crores revenue and INR 300 Crores EBITDA for FY27. Normalized EBITDA margins are projected between INR 15,000 to INR 17,000 per ton, with aspirations to reach 20-22% in the coming years.

🏦 Debt & Financial Health

Peak debt is projected not to exceed INR 750 Crores, with current long-term debt around INR 600 Crores. The company expressed confidence in generating sufficient accruals to manage debt repayment and potential pre-payments, supported by a working capital facility of INR 100 Crores.

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