Seshasayee Paper doubles profit to ₹33.59 cr, warns of margin squeeze ahead
A strong volume-led Q1 is shadowed by cost pressures from the West Asian conflict, a price rollback, and rising ocean freight. The ₹270 cr Erode expansion is on track.
— 2 earlier stories on Seshasayee Paper and Boards Ltd. →What's new
- Net profit nearly doubled to ₹33.59 cr on 27.7% revenue growth.
- Mills ran at 112% and 95% capacity, but July saw price rollbacks and cost headwinds.
- ₹270 cr Erode mill expansion under execution; recovery boiler planned by FY27-end.
Why this matters
The strong start to FY27 is tempered by macro pressures that are already hitting margins in July. For a company with zero debt, the expansion capex is manageable, but the near-term earnings trajectory appears cautious. The renewable energy addition from Sep/Oct could bring cost relief.
What we're watching
- Whether the July price rollback and cost pressures show up in Q2 margins.
- Commissioning of MDP-IV recovery boiler and evaporator by FY27-end.
- Start of renewable energy supply from hybrid solar/wind projects.
The full read
Seshasayee Paper and Boards posted a strong Q1: net profit nearly doubled to ₹33.59 crore, revenue jumped 27.7% to ₹492 crore, and sales volumes rose 19.4% to 66,026 tonnes. The Erode mill ran at 112% capacity and Tirunelveli at 95%, fuelled by productivity gains and demand from notebook makers and big printers. But the same letter that delivered the good numbers also sounded the caution. Management warned that the West Asian conflict has pushed up chemical and coal costs, price hikes taken in Q1 were rolled back in July amid fierce competition, and ocean freight rates are squeezing export margins — all headwinds that will hit Q2. Meanwhile, the ₹270 crore Mill Development Plan‑IV at Erode is under execution, with a recovery boiler and evaporator set for commissioning by FY27-end. Hybrid solar and wind projects are expected to start supplying power from September or October 2026, offering some future cost relief. The first quarter was strong. The near-term outlook is clouded.
Questions answered
- How did Seshasayee Paper deliver a near-doubling of profit?
- Revenue rose 27.7% to ₹492 cr, driven by 19.4% volume growth and better realisations. The Erode and Tirunelveli mills ran at very high capacity utilisation of 112% and 95% respectively.
- What risks does the company face in the near term?
- Management flagged that the West Asian conflict has raised chemical and coal costs. Price increases from Q1 were rolled back in July due to competition, and ocean freight rates have surged, pressuring export margins.
- What is the Mill Development Plan‑IV and its status?
- It is a ₹270 cr capex at the Erode mill. Key equipment like a recovery boiler and evaporator is planned for commissioning by the end of FY27.
- What was the capacity utilisation in Q1?
- The Erode mill ran at 112% and Tirunelveli at 95% capacity utilisation, driven by productivity gains and buoyant demand from notebook manufacturers and big printers.
- Is there any outstanding legal matter?
- An appeal by the former promoter of Servalakshmi Paper remains pending before the NCLAT. The company gave no update on the outcome.
- When will renewable energy projects start?
- Hybrid solar and wind power projects are expected to begin supplying energy from September or October 2026, which could reduce power costs.
Seshasayee Paper and Boards Ltd.
Latest quarter · Jun 2026
Strength & growth
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All notes on SESHAPAPER →- 25 Jul 2026 · 3:26 PM IST Seshasayee Paper doubles profit to ₹33.59 cr, warns of margin squeeze ahead
- 3d ago Seshasayee Paper net profit nearly doubles to ₹33.59 cr in June quarter
- 3d ago Seshasayee Paper net profit nearly doubles to ₹33.59 cr in June quarter