### **Overview** N R Agarwal Industries Limited (NRAGINDL), established in 1993 and headquartered in Mumbai with manufacturing units in Vapi and Sarigam, Gujarat, is a leading Indian manufacturer of recycled paper products. The company has transformed from a regional paper producer into one of India’s largest paperboard and recycled paper manufacturers. Under the leadership of Chairman & Managing Director Mr. R.N. Agarwal, with over 30 years of industry experience, NRAGINDL has strategically pivoted from traditional writing and printing paper to higher-margin paperboard and packaging solutions. Listed on both the NSE and BSE, the company operates three integrated facilities in Gujarat with a total production capacity of **440,000 MTPA** as of March 31, 2025. With the commissioning of a **900 TPD (approx. 300,000 TPA)** greenfield paperboard unit in FY2024, NRAGINDL has emerged as one of the **top seven paper companies in India** and the **largest producer of greyback and white back duplex board and recycled paper** in the country. --- ### **Recent Strategic Milestones (As of Aug 2025)** #### **1. Capacity Expansion & Cost Leadership** - The company expanded its paperboard manufacturing capacity from **500 TPD to 900 TPD** at an incremental cost of **₹350 crore**, achieving **>50% capacity growth at just 15% additional cost**. - The expansion, completed in Q4 FY2024, has one of the **lowest capital costs per ton in the Indian paperboard sector**, positioning NRAGINDL as the **lowest-cost producer on a per-ton interest outflow basis**. - A **7.5 MW captive power plant**, fueled by plastic extracted from wastepaper via a Plastic Fired Boiler (PFB), meets **36% of the plant’s energy needs** at **₹4/unit**—half the grid rate—with a projected payback of **24 months**, significantly enhancing cost efficiency. #### **2. Product Diversification & Market Positioning** - NRAGINDL is transitioning from commodity papers to **value-added paperboard variants**, including **Folding Box Board (FBB)**, **Solid Bleached Sulphate (SBS)**, and **Recycled Duplex Board**, addressing previously undersupplied or imported domestic demand. - Its duplex boards are **certified by India’s Central Food Technology Research Institute (CFTRI)**, making them suitable for food-grade packaging, offset printing, embossing, and foil stamping. - The strategic shift has enabled NRAGINDL to capture a growing share in high-demand sectors like **pharmaceuticals, FMCG, cosmetics, and liquid packaging**. #### **3. Financial and Operational Performance** - **Projected Revenue**: ₹2,200 crore for FY2025–26, up **36% YoY** from ₹1,617 crore in FY2023–24. - Nearly **all output is sold**, with finished goods inventory maintained at only **12 days of production**, indicating strong demand. - **Sales Geography**: ~60% in **western India**, ~30% **exports** to 33+ countries including the US, UK, UAE, Southeast Asia, and Africa. - The company expects **₹1,000–2,500 crore in annual revenue** from expanded operations, with strong cash generation anticipated as market conditions improve. --- ### **Growth Strategy & Expansion Plans** #### **Upcoming Projects** - **New Multilayer Board Plant (Unit VI)**: - Planned capacity: **1,000 TPD** - Total investment: **₹1,200 crore** over four years - Initial capex (FY2026–27): **₹250 crore** (covering board machine, pulp prep, land) - Funding: ₹120–130 crore from internal accruals, balance via term loans (₹130–150 crore) - This expansion aims to elevate NRAGINDL into the **pan-India and global packaging board leadership tier**. #### **Second Greenfield Unit Planned** - NRAGINDL intends to develop a **second large greenfield paperboard unit**, replicating its successful strategy of **acquiring equipment during downturns** to minimize capital outlay. - The plant will be located to leverage proximity to **western Indian ports (Mumbai, Hazira, Tumb)**—18 km from Tumb, 150 km from Hazira—for **logistical efficiency**, **lower freight costs**, and **export competitiveness**. --- ### **Competitive Advantages** - **Largest Single-Location Paperboard Unit in India**: Provides **economies of scale**, **lower cost per ton**, and **superior operational efficiency**. - **Brownfield Expansion Model**: Existing 100-acre **integrated plant in Sarigam** allows **low-cost, rapid scaling** without land-acquisition hurdles. - **Captive Power & Sustainability**: - 36% of power self-generated at **₹4/unit**, cutting costs and environmental impact. - **Recycling of plastic from wastepaper** supports circular economy goals. - **Water Management**: Two reverse osmosis (RO) plants with **2,300 m³/day** capacity recover treated water, reducing freshwater consumption and effluent discharge. --- ### **Strategic Transition & Portfolio Rationalization** - **Shift from Commodity to Value-Added Products**: The company has **divested lower-return segments**, including a writing & printing paper unit sold for ₹99 crore, to focus on **high-growth, high-margin paperboard**. - **Discontinuation of Suboptimal Units**: Smaller plants are being phased out to concentrate on **large-scale, efficient manufacturing**. - **R&D & Technology**: Equipment procured from **global technology leaders** has reduced production costs by **~500 bps** and improved product quality, enabling price leadership and market share gains. --- ### **Financial & Governance Highlights** - **Promoter Holding**: **73.55%** as of March 31, 2023—indicating strong promoter confidence. - **Debt Management**: - Capex funded via **mix of internal accruals (₹200 crore) and debt (₹500 crore)** for recent expansion. - Debt repayment structured over **7 years** to preserve cash flow. - Interest outflow reduced from ₹28.85 crore to ₹23.09 crore; **interest coverage ratio of 4.36**, **debt/EBITDA of 0.79**. - **Liquidity & Ratings**: Improved credit profile expected, enabling access to **cheaper financing** for future projects.