Packaging Stock Analysis

Standalone Net Profit (Continuing Operations) for Q3 FY26 significantly increased to Rs. 7,339.55 Lakhs from a loss of Rs. (2,396.21) Lakhs in Q3 FY25. / Standalone Revenue from operations (Continuing Operations) for Q3 FY26 grew to Rs. 10,461.98 Lakhs from Rs. 376.46 Lakhs in Q3 FY25. / Demerger of Non Woven business has been approved by the Board of Directors and is considered highly probable, potentially streamlining operations. / Financial assets of the holding company are growing, generating significant 'Other income' (Standalone Q3 FY26: 10.40 Lakhs), indicating strong accumulated cash flows in earlier years.

Auditor's inability to express conclusion on consolidated financial results due to unassessed fire losses and unreviewed financial results of material subsidiaries (Consolidated Auditor's Report, Para 6). / Significant consolidated net loss for Q3 FY26 of Rs. (10,009.23) lakhs and 9M FY26 of Rs. (2,700.64) lakhs, a major deterioration from 9M FY25 net profit of Rs. 28,056.72 Lakhs. / Substantial decline in consolidated revenue from continuing operations, decreasing from Rs. 1,18,593.54 Lakhs in Q3 FY25 to Rs. 37,165.88 Lakhs in Q3 FY26, and nearly halving for the nine-month period. / Unassessed losses from fire incident at a subsidiary's Nashik plant (May 21, 2025), with management continuing depreciation and carrying inventory at cost, obscuring the true financial impact. / Material unreviewed subsidiary results reflecting a net loss after tax of Rs. (12,611.46) lakhs for Q3 FY26 and Rs. (33,119.76) lakhs for 9M FY26, significantly impacting consolidated performance. / Negative foreign exchange impact included in other expenses, showing a net foreign exchange loss of Rs. 2,515.69 lakhs for nine months ending December 31, 2025 (Consolidated Note 3).

Discontinued nonwoven operations remained profitable with Rs. 201.16 lakhs net profit in Q3 FY2026 despite overall group stress, showing resilience in this segment pre-demerger / Other income contributed Rs. 10,461.98 lakhs in Q3 FY2026 (continuing operations), providing significant non-operating cushion from accumulated financial assets and prior slump sale proceeds / Nine-month operating cash generation from continuing operations shows some resilience with other equity (excluding revaluation) maintained at Rs. 4,378.64 lakhs despite quarterly losses / The company successfully claimed MAT credit and capital subsidy of Rs. 2,362.75 lakhs (nine months) and Rs. 1,895.69 lakhs (previous quarter) relating to earlier years, improving tax position

Catastrophic fire at Nashik plant in May 2025 destroyed property, plant, equipment, and inventory with unassessed losses; Rs. 8,224 lakhs GST deposited under protest creates significant contingent liability uncertainty / Continuing operations revenue collapsed 68.7% YoY (Q3: Rs. 37,165.88 lakhs vs Rs. 1,18,593.54 lakhs prior year), indicating severe business disruption beyond the fire incident / Finance costs surged 87.9% YoY to Rs. 2,918.16 lakhs in Q3 despite lower revenues, signaling deteriorating leverage and debt servicing pressure with inadequate operating cash flow coverage / Packaging films segment (core business) swung to Rs. 5,691.69 lakhs loss in Q3 FY2026 from Rs. 7,417.24 lakhs profit in Q3 FY2025, a Rs. 13,108.93 lakhs negative swing reflecting fundamental operational failure / Foreign exchange volatility created Rs. 2,515.69 lakhs net loss for nine months FY2026, indicating significant unhedged exposure and currency risk amplifying operational losses / Pending NCLT approval for nonwoven demerger creates structural uncertainty, with the scheme's appointed date of April 1, 2025 already elapsed but closure timeline unknown

Continuing-operations revenue rose sequentially to Rs. 37,165.88 lakhs in Q3 FY26 from Rs. 30,178.38 lakhs in Q2 FY26, indicating demand recovery in the core business. / Discontinued operation turned profitable sequentially at PAT of Rs. 201.16 lakhs in Q3 FY26 versus loss of Rs. 148.55 lakhs in Q2 FY26. / Finance costs declined in 9M FY26 to Rs. 9,626.65 lakhs from Rs. 16,759.61 lakhs in the prior comparable period, easing interest burden. / Balance-sheet coverage remains sizable in reported segment data, with total segment assets of Rs. 10,41,473.49 lakhs versus total segment liabilities of Rs. 5,01,126.41 lakhs at Dec 31, 2025. / Other income remained substantial at Rs. 7,464.55 lakhs in Q3 and Rs. 27,774.12 lakhs in 9M, providing a buffer to reported total income.

Statutory auditors stated they were unable to express a conclusion on consolidated results, a major reporting-quality red flag. / The Nashik fire (May 21, 2025) caused substantial damage to plant and inventory, but loss assessment is still pending; meanwhile inventory is carried at cost and depreciation continues, creating earnings uncertainty. / The company deposited GST of Rs. 8,224 lakhs under protest related to fire-destroyed assets/inventory, which can pressure liquidity and indicates unresolved regulatory/claim treatment. / Profitability is deeply negative: Q3 FY26 consolidated PAT was Rs. -9,691.66 lakhs and 9M FY26 PAT was Rs. -7,381.14 lakhs, with 9M EPS at Rs. -10.69 versus positive prior period. / Earnings include notable exceptional items (Rs. -241.78 lakhs in continuing operations and Rs. -44.42 lakhs in discontinued operations in Q3) and tax one-offs, reducing recurring earnings visibility. / A material subsidiary contributed Q3 loss after tax of Rs. -12,611.46 lakhs (management-certified, not reviewed), increasing reliability and consolidation risk.