**NSE Emerge: NIKITA | ISIN: INE0P6L01014** **Nikita Greentech Recycling Limited** (formerly **Nikita Papers Limited**) is a leading Indian manufacturer of high-quality **Kraft Paper** produced from **100% recycled waste paper**. Established in **1989** and listed on the **NSE Emerge (SME)** exchange in **June 2025**, the company has successfully transitioned from an agro-based fiber model to a sophisticated circular economy business. By integrating waste management, renewable energy, and advanced paper manufacturing, the company has positioned itself as a key player in the sustainable packaging value chain. --- ### **The Circular Business Model: Waste-to-Product Integration** The company operates a closed-loop manufacturing process, converting domestic and international waste paper into essential packaging solutions for the **FMCG, Food & Beverage, Pharmaceutical, and Cosmetics** sectors. * **Raw Material Sourcing:** The company utilizes a strategic mix of **88% domestic** and **12% imported** waste paper. Domestic supply is secured via a network of **20–25 stockists** within a **100 km** radius (Delhi, UP, NCR). Imports are primarily sourced from the **US and Canada** to obtain longer fiber strength necessary for high-grade products. * **Revenue Diversification:** Beyond paper sales, the company generates revenue through the sale of **EPR (Extended Producer Responsibility) Credits**. These credits are earned by incinerating municipal plastic waste, contributing **₹5.29 crore** in **FY25**. * **Distribution Channels:** Corrugation grades are sold through a distributor network reaching **75–100 converters**, while **Specialty Grades** are managed via direct B2B interactions to meet precise technical specifications. --- ### **Manufacturing Infrastructure & Capacity Expansion** Operating from a state-of-the-art facility in **Shamli, Uttar Pradesh**, the company has scaled from a modest **30 TPD** unit in 1991 to a high-capacity industrial operation. | Metric | Current Status (2025) | Expansion Target (2026-2027) | | :--- | :--- | :--- | | **Installed Capacity** | **1,33,000 MTPA** | **1,80,000+ MTPA** | | **Daily Production** | **400 TPD** | **550 TPD** (CTE Granted) | | **Capacity Utilization** | **~82%** | Target **90%+** via power stability | | **Product Range** | **80-200 GSM** | Focus on **Specialty Grades** | | **Workforce** | **213 Employees** | Expanding with new lines | The company is currently executing a **₹107.50 crore** integrated expansion plan. This includes upgrading **Paper Machinery (PM-1)** and installing **PM-2**, supported by an **MoU with the Government of Uttar Pradesh** which provides access to interest subsidies and state concessions. --- ### **Energy Self-Sufficiency & ESG Integration** A core pillar of the company’s strategy is the elimination of grid dependency and fossil fuel costs, which are primary drivers of manufacturing overhead. * **Energy Transition:** The company moved from coal to **Biomass** in 2018 and transitioned to **RDF (Refuse-Derived Fuel)** in 2022. Currently, **50%** of fuel requirements are met by RDF. * **Captive Power Infrastructure:** * **3.5 MW** Municipal Waste-to-Energy plant currently operational. * **1.5 MW** Rooftop Solar plant. * **9 MW Captive Power Plant (Turbine):** A **₹50 Crore** project funded by IPO proceeds, expected to commission by **Q3 FY27**. * **Economic Impact:** The new power plant is expected to save approximately **₹18-19 Crore** in annual electricity costs, making the facility **100% energy self-sufficient**. * **Environmental Standards:** The facility operates as a **Zero Liquid Discharge (ZLD)** unit with closed-loop water systems and real-time analytics for production optimization. --- ### **Product Portfolio & Market Evolution** The company is aggressively shifting its product mix toward **Specialty Grades**, which command higher margins (**13-14% EBITDA**) compared to standard corrugation paper. * **Standard Kraft Paper:** High-strength paper for corrugated boxes; currently **88-90%** of volume. * **Specialty & Value-Added Grades:** Includes **Food Grade, Waterproof, Carry Bag, Shopping Bag, Fluting Media,** and **Multi-liner Kraft**. This segment is targeted for **18-20% CAGR**. * **Import Substitution:** Developing high-GSM and high-Burst Factor (BF) grades to compete with premium imported paper from ASEAN countries and China. * **B2C Transition:** Strategic move toward direct brand engagement and manufacturing finished products for consumer-facing brands. --- ### **Financial Performance & Capital Structure** The company has maintained a consistent growth trajectory, bolstered by its **June 2025 IPO** which raised **₹67.5 crore**. | Financial Indicator (Rs. in Lacs) | FY 2024-25 | FY 2023-24 | Growth % | | :--- | :--- | :--- | :--- | | **Total Turnover** | **36,442.43** | **33,860.08** | **+7.63%** | | **Net Profit (PAT)** | **2,301.88** | **2,072.37** | **+11.07%** | | **Paid-up Share Capital** | **2,466.79** | **1,817.35** | **+35.73%** | | **EBITDA Margin** | **~13-14%** | **~12-13%** | — | * **Liquidity & Debt:** The company maintains working capital facilities of **₹88 Crore** (PNB at **8.60%** and HDFC at **8.25%**). Outstanding term loans stand at **₹32 Crore** at **9% p.a.** * **Strategic Rebranding:** The name change to **Nikita Greentech Recycling Limited** (Oct 2025) reflects the shift toward green tech, waste management, and bio-energy (including a planned **2 TPD Compressed Bio Gas** plant empaneled by **IGL**). --- ### **Risk Profile & Mitigation Strategies** Nikita Greentech operates in a cyclical, resource-intensive industry and manages risks through vertical integration. * **Raw Material Volatility:** Fluctuations in waste paper and wood pulp prices are mitigated by a diversified sourcing network and a focus on **100% recycled feedstock**. * **Operational Risks:** High sensitivity to energy costs is addressed by the **9 MW Waste-to-Energy** project, shielding the company from grid tariff hikes. * **Market Competition:** Influx of low-cost imports is countered by focusing on **Specialty Grades** and expanding into export markets in **Southeast Asia, the Middle East, and Africa**. * **Working Capital Cycle:** The corrugation segment involves longer credit periods; management is optimizing this by increasing the share of direct B2B specialty sales. * **Regulatory & Contingent Liabilities:** The company maintains **ZLD** status to meet environmental norms. Current contingent liabilities include **₹189.15 Lacs** in foreclosure charges and **₹18.42 Lacs** in GST demands, which are being managed through legal/administrative channels.