Credit Rating

SAT I A An ISO 9001, 14001 & 45001 company Manufacturer of Quality Writing, 1S 1848 CIN : L21012PB1980PLC004329 Printing & Speciality Paper INDUSTRIES www.satiagroup.com LIMITED SIL/CS Date: 29.07.2026 The Manager, The Manager Listing Department, Listing Department BSE Limited, National Stock Exchange of India Ltd Phiroze Jeejeebhoy Towers Exchange Plaza, Plot no. (/1, G Block, Dalal Street Bandra-Kurla Complex, Bandra (E) Mumbai-400001 Mumbai - 400 051. Scrip Code: 539201 Symbol: SATIA Subject: Submission of Rating issued by India Ratings & Research (Ind-Ra)- Satia Industries Limited (SIL) Dear Sir/Madam, Pursuant to Regulation 30 and other applicable provisions of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015. We are enclosing herewith copy of the rating issued by India Ratings & Research Private Limited (Ind-Ra) and have assigned the following credit rating to Satia Industries Limited. Details of Instruments Instrument|Regulator of| Date of | Coupon [Maturity|Size of Issue[Rating Assigned along| Rating Type Instrument |Issuance|Rate (%)| Date |(INR million)| with Watch/Outlook | Action Bankloan RBI - - - 6,990 [IND A+/Stable/IND A1+ (Affirmed| facilities Proposed RBI - - |Up to 365 350 IND Al+ |Affirmed| lcommercial| days paper* *Carved out and sub-limit of existing fund-based working capital limits. This is for you reference and records please. Thanking you, Yours Faithfully, For Satia Industries Limited 1 RAKESH _ D! AKUMAR- x0s orn DHURIA s icsio (Rakesh Kumar Dhuria) Company Secretary and Compliance Officer Regd. Office & Mill : Village Rupana, Sri Muktsar Sahib-152 032, Punjab India email: satiapaper@satiagroup.com Branch : 613-616, Naurang House, 21, K.G. Marg, Connaught Place, New Delhi-110001 email : sales.delhi@satiagroup.com Branch : A-302, Elante Office, Industrial Area, Phase-1, Elante Mall, Chandigarh-160002 email: satiapaper@satiagroup.com Branch : 304, Navieevan Complex, 29, Station Road, Jaipur-302006, Rajasthan email: sales.jaipur@satiagroup.com IndiaRatings &;Resegrch India Ratings Affirms Satia Industries’ Bank Facilities at 'IND A+'/Stable/'IND A1+’ and Proposed CP at 'IND A1+’ Jul 29, 2026 | Satia Industries Limited | Paper & Paper Products India Ratings and Research (Ind-Ra) has affirmed the ratings on Satia Industries Limited’s (SIL) bank facilities and other debt instruments as follows: Details of Instruments Instrument Regulator of Date of Coupon Maturity Size of Issue Rating Assigned along Rating Type Instrument Issuance Rate (%) Date (INR million) with Watch/Outlook Action Bank loan RBI - - - 6,990 IND A+/Stable/IND A1+ | Affirmed facilities Proposed RBI - - Up to 365 350 IND A1+ Affirmed commercial days paper* *Carved out and sub-limit of existing fund-based working capital limits. Analytical Approach Ind-Ra continues to take a standalone view of SIL for the rating review. Detailed Rationale of the Rating Action The affirmation reflects SIL’s comfortable business profile with integrated operations, a healthy market position in the state textbook segment, operational efficiencies driving robust EBITDA margins (averaging 16%-17% over the past 10-15 years), and healthy cash flow generation through industry cycles. While the existing capacities are fully utilised, Ind-Ra expects SIL’'s ongoing capacity expansion to drive volume growth in FY28. Ind-Ra believes SIL’s integrated operations and cost efficiencies with the ability to use multiple feedstocks would ensure a healthy margin profile through the cycle. SIL's EBITDA margin declined to a 15-year low of around 8.5% in FY26 (FY25: 18%) due to a combination of weak realisations from sustained import pressure and elevated feedstock costs impacting profitability across the industry. The paper industry is inherently cyclical, with volatility largely driven by the supply side. The weakness in paper prices is attributable to competition from low-priced imports, amid India’s writing and printing paper segment recording low-single- digit year-over-year domestic demand growth. A sharp increase in wheat straw (key raw material) costs mainly due to floods in Punjab, hit the margins in FY26. The paper price recovery witnessed over the past few months (May 2026: INR71.5/kg vs December 2025: INR65/kg) is likely to continue and realisations are likely to average higher yoy in FY27. However, the agency expects SIL’s margins to be stable in FY27, given the planned shutdown for upgrading one of its four paper machines and an increase in costs of some of the inputs, with a significant recovery likely from FY28 due to increased volumes and improved operational efficiencies after the completion of its ongoing capex. The ratings continue to be supported by SIL’'s comfortable credit metrics, although its net leverage (net debt/EBITDA) rose to 1.4x in FY26 (FY25: 0.4x) due to a sharp fall in profitability. Ind-Ra expects the ongoing capex for increasing paper capacity and improving operational efficiencies and lower EBITDA to increase the net leverage to over 2x in FY27. However, the ratio should reduce meaningfully in FY28 and remain within Ind-Ra’s rating sensitivity thereafter. List of Key Rating Drivers Strengths Strong business profile with integrated operations; healthy market position in state textbook segment Operating efficiencies to keep margins healthy over the cycle Capex to drive medium-term business growth Credit metrics to remain robust Weaknesses Operational EBITDA to fall marginally in FY27; gradual recovery to mid-cycle levels by FY28 Industry cyclicality risks Detailed Description of Key Rating Drivers Strong Business Profile with Integrated Operations; Healthy Market Position in State Textbook Segment: SIL is among India’s leading integrated manufacturers of writing and printing paper with an operating track record of over four decades. It has a total installed paper manufacturing capacity of more than 200,000 tonnes per annum (tpa), comprising various varieties, colours, and grades. SIL has an integrated manufacturing facility, which includes paper machines, an in- house pulp processing facility, a captive power generation plant to meet almost its entire power requirement, and a chemical recovery plant. While the paper industry is fragmented, the number of integrated players with scale comparable to SIL is limited as high capital investment, technical expertise, gestation period, and raw material procurement challenges restrict entry. SIL has a healthy market share of 10%-15% in the state textbook market in India. It has a longstanding relationships with the state textbook corporations for supplying paper. The state textbook segment usually commands higher operating margins than SIL's open market sales and contributes 30%-50% to its overall sales. Furthermore, SIL’s product mix comprises multiple products used in both education and corporate sectors. Maplitho and snow-white papers were the highest contributors to SIL’s total sales in FY26, accounting for 32% and 17%, respectively, while other varieties included surface size, copier, cream wove, and high-quality SS Maplitho papers. Operating Efficiencies to Keep Margins Healthy Over the Cycle: SIL has a well-diversified feedstock base, consisting of wood (chips, pulp) and agricultural residue (wheat straw), with different demand-supply dynamics. SIL’'s Muktsar (Punjab) plant has adequate availability of raw materials such as wheat straw, wood chips, and veneer waste. SIL procures its key raw materials (wheat straw, rice straw, wood chips) largely from local catchment areas. Over the past two decades, the wood panel and paper industries have collaborated with farmers to promote large-scale plantations of fast- growing species, such as poplar and eucalyptus, to address the growing wood demand. SIL continuously invests in and upgrades its plant to optimise operating efficiencies and improve profitability through measures such as upgrading paper machines and pulping mills, installing multi-fuel boilers [Showing first 8,000 characters — download PDF for full document]