Orient Paper Q2 FY27 Results (NSE: ORIENTPPR)
Signal: Loss narrowed
The read
The quarter shows a gross-margin inflection but not an earnings recovery: gross margin expanded 485bps YoY as raw-material intensity fell to 39.19%, yet revenue declined 8.3%, EBITDA remained negative at ₹2,322.65 lakh and the PAT loss was ₹2,875.29 lakh; the sequential reversal from Q1's ₹825.03 lakh loss and the chemicals slowdown are the key trajectory concerns.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹183.14 Cr | -8.3% | -19.5% |
| EBIT | ₹-23.23 Cr | loss narrowed 28.2% | |
| Net profit | ₹-28.75 Cr | loss narrowed 6.0% | |
| EPS | ₹-1.35 | loss per share narrowed 6.3% | |
| EBIT margin | -12.68% |
P&L walk
Standalone revenue fell 8.3% YoY to ₹18,313.77 lakh and the loss narrowed only 6.0% to ₹2,875.29 lakh; gross margin expanded 485bps as raw-material intensity declined, but higher employee costs, finance costs and the chemicals slowdown kept EBITDA negative.
Segments
Paper & Tissue remained the main drag with revenue of ₹14,924.86 lakh and a ₹2,948.50 lakh loss, although its loss narrowed from ₹4,383.92 lakh YoY; Chemicals revenue fell 13.3% to ₹3,701.05 lakh and its result collapsed to ₹38.45 lakh from ₹573.84 lakh.
Key positives
- Gross margin expanded 485bps YoY to 56.49%, with raw-material cost declining to 39.19% of revenue from 50.08%.
- Power and fuel intensity improved to 19.37% of revenue from 21.24% YoY, supporting a 352bps YoY improvement in derived EBITDA margin to -12.68%.
- Paper & Tissue's loss narrowed to ₹2,948.50 lakh from ₹4,383.92 lakh YoY, while EPS loss narrowed 6.3% to ₹1.35.
Key concerns
- Revenue declined 8.3% YoY to ₹18,313.77 lakh and 19.5% sequentially, with no volume or realisation explanation disclosed.
- Chemicals revenue declined 13.3% YoY to ₹3,701.05 lakh and segment result fell 93.3% to ₹38.45 lakh.
- Employee benefits rose 8.1% YoY and finance costs rose 23.0%, offsetting much of the gross-margin benefit.
- The company moved from a ₹825.03 lakh loss in Q1FY27 to a ₹2,875.29 lakh loss in Q2FY27, while H1 operating cash flow was negative at ₹155.32 lakh.
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