Seshasayee Paper reports Q2 profit decline amid market headwinds

Seshasayee Paper and Boards Limited reported a standalone net profit after tax of INR 17.80 crores for the quarter ended September 30, 2025, a decrease from INR 24.78 crores in the same quarter last year. Consolidated net profit after tax stood at INR 22.41 crores, down from INR 28.47 crores year-on-year. This decline is primarily due to lower average realizations per tonne of paper, a significant drop in export sales volumes, particularly to the US due to steep tariffs, and an increase in wood costs.

The company's Unit-Erode operated at 103% capacity utilization, while Unit-Tirunelveli operated at 76%. Domestic sales saw a 4.8% increase, but overall sales volumes decreased by 3.1%. The domestic paper market was sluggish due to GST 2.0 reforms increasing paper GST from 12% to 18%, making imported paper cheaper, and creating pricing pressures from mills liquidating inventory. The international market also showed no signs of recovery, with continued low prices from Indonesia and China.

To address challenges and enhance energy efficiency, Seshasayee Paper is undertaking the MDP-IV project at a reduced cost of INR 270.0 crores. The company also invested INR 26.0 crores in a Special Purpose Vehicle (SPV) to develop 52.8 MWp (DC) / 35.2 MW AC solar and 9 MW wind power capacity, expected to supply power exclusively to the company in Q1 of next fiscal year. The company is actively pursuing the revival and recommencement of operations for Servalakshmi Paper Limited's assets, acquired via e-auction.