Why Did West Coast Paper Mills Experience a 64% Drop in Q4 Net Profit?
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Synopsis
West Coast Paper Mills Limited has encountered a significant decline in net profit, raising concerns about its financial health. With a drop of over 64%, stakeholders are keen to understand the underlying factors affecting this downturn. Stay tuned as we explore the details of their quarterly performance and future outlook.
Key Takeaways
- 64.63% drop in net profit YoY.
- Total income decreased by 3.76%.
- Expenses rose by 7.85%.
- EBITDA fell by 52.4%.
- Dividend of Rs 5 proposed, pending approval.
Mumbai, May 23 (NationPress) West Coast Paper Mills Limited disclosed on Friday that its net profit has seen a remarkable decline of 64.63 per cent year-on-year (YoY), amounting to Rs 46.14 crore, compared to Rs 130.42 crore recorded in the same quarter last fiscal (Q4 FY24).
On a quarter-on-quarter (QoQ) basis, net profit decreased by approximately 31.55 per cent from Rs 67.41 crore in the previous quarter (Q3), as indicated in its stock exchange filing.
Revenue for the quarter also took a slight hit, dropping by 3 per cent to Rs 1,041 crore, down from Rs 1,070 crore in the corresponding period last year (Q4 FY24).
In a similar vein, the company's total income fell by around 3.76 per cent, totaling Rs 1,086.12 crore for this period, compared to Rs 1,128.61 crore a year earlier.
Moreover, total expenses saw an increase of roughly 7.85 per cent, reaching Rs 1,030 crore in Q4 FY25, up from Rs 955.03 crore in the same period last year.
A significant factor in this expense rise was the cost of materials consumed, which surged by over 26 per cent to Rs 657.99 crore from Rs 521.9 crore in Q4 FY24.
In contrast, employee benefits expenses experienced a reduction of about 8.23 per cent, decreasing to Rs 93.87 crore from Rs 102.28 crore in the same quarter of the previous year.
Meanwhile, finance costs saw a steep increase, more than doubling by 131.42 per cent to Rs 12.89 crore, compared to Rs 5.57 crore in Q4 FY24.
The company's earnings before interest, tax, depreciation, and amortisation (EBITDA) experienced a significant drop as well, plummeting 52.4 per cent to Rs 80.8 crore, down from Rs 169.6 crore last fiscal.
Margins faced considerable pressure, contracting by 810 basis points to 7.8 per cent compared to 15.9 per cent in the same quarter the previous year, according to the filing.
Despite these hurdles, the company's board has proposed a dividend of Rs 5 per equity share, which has a face value of Rs 2.
This dividend rate of 250 per cent pertains to the financial year ending March 31 and awaits approval from shareholders at the forthcoming Annual General Meeting (AGM).
Following the earnings report, shares of West Coast Paper Mills Limited fell by 2 per cent to Rs 467.80 per share.
The stock has seen a decline exceeding 15 per cent so far this year.
Point of View
It's crucial to recognize the challenges faced by West Coast Paper Mills Limited amidst declining profits. Their financial results signal a need for strategic reassessment as they navigate a competitive market. We stand with the nation in seeking transparency and accountability in corporate governance.
NationPress
08/06/2025
Frequently Asked Questions
What caused the drop in net profit for West Coast Paper Mills?
The significant drop in net profit was attributed to rising material costs, increased total expenses, and a decline in revenue.
How much did the company's total income decrease?
The total income decreased by approximately 3.76 per cent to Rs 1,086.12 crore.
What was the company's EBITDA for Q4 FY25?
The company's EBITDA fell to Rs 80.8 crore, representing a 52.4 per cent decrease compared to the previous fiscal year.
Did the company declare any dividends?
Yes, the board recommended a dividend of Rs 5 per equity share, subject to shareholder approval at the AGM.
How have the company’s shares performed following the announcement?
After the earnings announcement, the shares dropped by 2 per cent to Rs 467.80.
