Tamil Nadu Newsprint & Papers Ltd (TNPL) — concall transcript | 30 June 2023

TNPL reported record FY23 results with INR 5,000 crore turnover and INR 603 crore PAT, driven by paper segment growth and in-house pulp benefits. Q1 FY24 revenue rose 12% YoY to INR 1,273 crore, EBITDA grew 84% to INR 325 crore, and PAT surged 115% to INR 200 crore. Debt-equity improved to 0.93 from 1.31, with debt repayment planned until 2029 at ~INR 250 crore annually. Management expects EBITDA margins of 18-20% in Q2, targeting 20-25% long-term, while effective tax rates normalize to 25% by FY25 post-MAT credit expiry. Raw material costs are easing as imported pulp prices fall from 800+ to 600 levels and coal costs decline, though wood prices remain elevated. Capacity utilization stands at 95% for the new pulp mill, with plans to expand by 25% through debottlenecking and potential spare pulp use for mix adjustments. Export volumes constitute 18-20% of sales, but Chinese dumping pressures packaging boards, while custom products remain resilient. The company emphasized stable fiber mix (40% wood, 40% bagasse, 20% recycled), seasonal bagasse cost volatility, and commitment to consistent reporting. Capex remains cautious, focusing on incremental improvements rather than large projects, with no new borrowings planned.