Kanpur Plastipack Dividend 2026 — ₹1.20 Record Date 3 Aug | KANPRPLA

Kanpur Plastipack Limited (NSE: KANPRPLA, BSE: 507779) has recommended a Final Dividend of ₹1.20 per share (12% on ₹10 face value) for FY2025-26, subject to shareholder approval at the ensuing Annual General Meeting.

One-line takeaway: The ₹1.20 dividend is trivially affordable — covered 14× by earnings and 12× by free cash flow — but it is a small payout (payout ratio ~7%) from a micro-cap that treats dividends as a residual, not a priority. The eye-catching “profit up 245%” headline is heavily flattered by a weak prior-year base.

At its Board Meeting held on Saturday, 02 May 2026 (12:55 PM to 5:10 PM), the Board of Directors of Kanpur Plastipack Limited approved the audited standalone and consolidated financial results for the quarter and year ended 31 March 2026 and recommended a final dividend of ₹1.20 per equity share (12%) for FY2025-26. The recommendation is subject to shareholder approval at the ensuing AGM. The statutory auditors, M/s Rajiv Mehrotra & Associates, issued an unmodified (clean) audit opinion.

Yield reality check — why it is so low

The ~0.57% yield is a product of a strong share price, not a strong dividend. KANPRPLA has re-rated sharply — the stock is up roughly 50–64% over the past year and trades near a P/E of ~12× — while the dividend itself is modest. A rising price mechanically compresses yield. This is not a high-yield income stock; it is a re-rating micro-cap that happens to pay a token dividend.

Important: live CMP must be re-checked at publish time. At ₹212 the yield is 0.57%; a ₹20 move in either direction shifts it by roughly ±0.05 percentage points. (Price source: Screener.in, as of late July 2026 — Not Independently Verified at your publish moment.)

Non-obvious finding #1 — the “245% surge” is base-effect-flattered

Total PAT jumped from ₹11.1 Cr to ₹39.5 Cr (+255.6%), but the FY25 base was crushed by a ₹12 Cr discontinued-operations loss from winding down the CPP (cast polypropylene) film division. Strip out discontinued operations and continuing-operations PAT grew a still-strong but far more grounded ~76% (₹23.1 Cr → ₹40.8 Cr). The truer growth story is a doubling, not a tripling.

Non-obvious finding #3 — the investing cash inflow is a one-time event

FY26 investing activities show a rare positive ₹22.9 Cr inflow — but this is entirely due to a one-time asset sale of ~₹56.1 Cr (proceeds from selling the discontinued CPP division’s plant). Recurring capex was ₹14.6 Cr. Do not read this as a repeatable cash engine. Those proceeds were used to slash debt (see Balance Sheet). FY27 investing cash flow will very likely revert to negative.

The deleveraging story

Short-term borrowings fell sharply year-on-year and finance costs dropped ~19.5% — a direct benefit of channeling the CPP-division sale proceeds into debt reduction. This lower interest burden is a genuine, recurring tailwind to profit. However, the flip side is a modest cash cushion of ~₹16 Cr: this is a company that runs lean on liquidity and relies on working-capital lines, which is worth watching if demand softens.

Verdict: Sustainable (as an amount) — but structurally small and cycle-linked

All four coverage tests pass with wide margins — a payout ratio of only ~7% means the ₹1.20 is easily affordable at current earnings. The nuance our competitors miss: affordability is not the same as reliability. The dividend’s history shows cuts and a skip whenever profits dipped. So while the current amount is safe, the future amount is tied to a cyclical, restructuring-affected earnings base. Sustainable in size, not guaranteed in consistency.

Non-obvious finding #4 — cheapest and most profitable, yet lowest-paying

KANPRPLA screens with the highest ROE (15.6%) and ROCE (17.2%) in this set while trading at the lowest P/E (~12×) — it out-earns market-leader Time Technoplast on returns yet trades at a ~33% valuation discount. But it also runs the lowest payout ratio (~7%): it retains far more of its profit than peers. Investors get a profitable, cheaply-valued business, but almost none of the reward is coming back as dividend. (Note: KANPRPLA’s 3-year average ROE is a much lower ~7.9%, dragged down by the CPP-division loss years — the 15.6% is a recovery figure, not a long-run through-cycle number.)

Distribution impact

With promoters holding 68.12%, roughly ₹2.00 Cr of the ₹2.94 Cr dividend flows to the promoter group; public shareholders (~30.4%) share about ₹0.89 Cr, and institutions (DII ~1.48%, FII ~0%) receive a negligible amount. Because the payout is small, the promoter benefit is modest in absolute terms — and note that promoters have been increasing their stake, which is generally read as an alignment-of-interest signal rather than a cash-extraction one.

Ownership structure — a double-edged sword

FIIs have exited to ~0%, mutual funds hold nothing, and DII participation is just 1.48%. The stock is effectively off the institutional radar — which means low analyst scrutiny and thin liquidity, amplifying price (and therefore yield) volatility.

Since April 2020, dividends in India are taxed in the hands of the shareholder at their applicable income-tax slab rate (the company no longer pays Dividend Distribution Tax). Under Section 194, the company deducts TDS at 10% only if a resident shareholder’s total dividend from that company in the financial year exceeds ₹10,000 (threshold raised from ₹5,000 with effect from FY2025-26). Investors can file Form 15G / 15H to avoid TDS if their income is below the taxable limit.

Worked example — retail investor holding 1,000 shares

Illustrative only. Even without TDS, the dividend remains fully taxable and must be declared in the investor’s return. Lower-slab investors keep more; a 30%-slab investor nets under half a percent.

The positives

Kanpur Plastipack’s ₹1.20 dividend sits on a genuinely improved FY26: revenue up ~28%, real margin expansion (+143 bps), operating cash flow of ₹50.6 Cr exceeding profit, a ~19.5% cut in finance costs, and sector-leading returns (ROE 15.6% / ROCE 17.2%) at a low ~12× P/E. The dividend is covered 14× by earnings and 12× by free cash flow — affordability is not in doubt.

The negatives & the honest framing

The “profit up 245%” headline is base-effect-flattered (underlying growth ~76%); the investing cash inflow was a one-time asset sale, not a recurring engine; the ~0.57% yield is a function of a re-rated price, not a generous payout; and the dividend record is cyclical/irregular, with past cuts and a skip. Liquidity is thin and the stock is off the institutional radar.

Net-net: This is a recovering, cheaply-valued, cash-generative micro-cap whose dividend is safe in size but small and cycle-linked. It suits readers focused on the business turnaround, far less those seeking dividend income. We present the facts, positives, negatives, risks and monitoring points — the decision is yours.