Why Did Seshasayee Paper Q2 Net Profit Drop by 21%?
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Synopsis
Discover the latest financial performance of Seshasayee Paper and Boards Ltd as they reveal a significant drop in net profit for Q2 FY26. Explore the reasons behind this decline and what it means for the company's future.
Key Takeaways
- 21.3% YoY decline in net profit for Q2 FY26.
- Revenue from operations fell 13.1%.
- EBITDA decreased by 14.4%.
- Investment of Rs 26 crore in SPV for equity stake.
- Stock has dropped over 18% year-to-date.
Mumbai, Oct 25 (NationPress) Seshasayee Paper and Boards Ltd has disclosed a significant 21.3% year-on-year (YoY) drop in its consolidated net profit for the second quarter of FY26, according to a regulatory filing issued on Saturday.
The company's net profit was reported at Rs 22.4 crore, a decrease from Rs 28.5 crore in the same quarter last year.
Additionally, revenue from operations decreased by 13.1%, totaling Rs 346.3 crore, down from Rs 398.5 crore in the prior year's comparable period.
The earnings before interest, tax, depreciation, and amortisation (EBITDA) was recorded at Rs 26.3 crore, reflecting a 14.4% decline from Rs 30.7 crore a year prior.
The EBITDA margin for this quarter was 7.6%, slightly below 7.7% in the same quarter last year.
During the quarter, the company allocated Rs 26 crore towards a special purpose vehicle (SPV) to secure a 26.1% equity stake, aligning with the conditions of its investment agreement.
Seshasayee Paper and Boards Ltd, a prominent manufacturer of writing and printing paper, observed a modest increase in its shares on Friday, closing at Rs 256.0, up 0.20% ahead of the Q2 results announcement. Over the last five days, the stock has appreciated by nearly 1.5%, but remained unchanged over the past 30 days. Year-to-date, the stock has seen a decline of over 18%, and over the past year, shares have fallen by 14%.
As the flagship entity of the ‘SPB-ESVIN Group’, Seshasayee Paper and Boards Limited (SPB) manages an integrated pulp, paper, and paperboard mill located in Pallipalayam, Erode district, Tamil Nadu, alongside another mill in Tirunelveli District, Tamil Nadu.
Established in June 1960, SPB was developed in partnership with its foreign collaborator, M/s Parsons and Whittemore, USA.
Point of View
I recognize the significance of Seshasayee Paper and Boards Ltd's recent financial disclosure. The decline in net profit raises questions about market conditions and operational challenges. However, it is crucial to consider the broader economic context and how companies adapt to evolving industry dynamics.
NationPress
26/10/2025
Frequently Asked Questions
What caused the decline in Seshasayee Paper's net profit?
The decline in net profit can be attributed to reduced revenue from operations and lower EBITDA compared to the previous year.
What is the EBITDA margin for Q2 FY26?
The EBITDA margin for the second quarter of FY26 is reported at 7.6%, slightly lower than the 7.7% margin from the same quarter last year.
How has the stock performed recently?
Seshasayee Paper's stock showed a slight increase of 0.20% ahead of the Q2 results announcement, but it has faced an overall decline of over 18% this year.
