Seshasayee Paper and Boards Ltd. (SPBL) reported a largely flat performance in the December quarter, with standalone net profit at ₹15.53 crore compared with ₹15.81 crore in the year-ago period, impacted by a sharp decline in exports following steep U.S. tariff hikes.
Revenue from operations fell to ₹387 crore from ₹431 crore a year earlier. Total production declined by 1.8%, while sales volumes dropped by 4.2% during the quarter.
Export volumes were significantly lower due to the suspension of shipments to the U.S. between June and September 2025 after the imposition of steep tariffs. While the Erode unit operated at 105% of its capacity utilisation level during April–December 2025, the Tirunelveli unit ran at 73%, largely due to reduced export orders and higher shop-floor work-in-progress, Chairman N. Gopalratnam said.
Profitability pressures
According to him, the marginal decline in profitability was mainly due to lower average realisations per tonne of paper and reduced export volumes. These pressures were partially offset by lower production costs driven by improved operational efficiencies.
The domestic paper market remained sluggish for most of the third quarter owing to uncertainty following the GST 2.0 reforms announced in September 2025. The removal of GST on paper used for notebooks gave imported paper a 12–15% cost advantage over domestically produced paper, disrupting the market for nearly three months. Market conditions began stabilising by end-December, though at price levels lower than those prevailing prior to the reforms. Availability of cheaper imports continues to be a concern.
Global supply chain disruptions caused by U.S. tariffs and geopolitical tensions in the Middle East further weighed on export volumes and realisations. International paper markets remain weak, with prices from Indonesia and China continuing to decline. Average realisations in the December quarter fell nearly 4% compared with the first half of the year.
Capex, renewables
SPBL has received environmental clearance from the Ministry of Environment, Forest and Climate Change for its Mill Development Plan-IV, involving an investment of ₹270 crore to increase pulp and paper capacity by 20%. The company is awaiting Consent to Establish from the Tamil Nadu Pollution Control Board and expects to commence project execution in February 2026, with modules scheduled for commissioning over 12–18 months.
The company has also invested ₹26 crore in a special purpose vehicle for developing 562.8 MWp (DC) of solar power capacity and 9 MW of wind power capacity, in partnership with Zelestra Corporacion S.A.U. and Navia One Power Pvt. Ltd. Power generation from these facilities is expected to begin in the first quarter of FY27.
Outlook
With the onset of the notebook season in December, demand from the notebook and copier segments has picked up. Market sentiment has improved in January 2026 compared with the first nine months of FY26. Domestic paper mills have announced price hikes of about 2% in January, which are being implemented fully. However, the export market is expected to remain challenging until the India-U.S. trade issues are resolved, he said.
Seshasayee Paper Q3 Profit Flat Amid Export Slump, Weak Realisations
