High LeverageA debt-to-equity ratio near 1.5 implies material leverage that limits financial flexibility. Sustained leverage increases interest expense and refinancing risk, constraining capital allocation and making the company more vulnerable to cyclical swings or margin pressure over the medium term.
Declining Free Cash FlowA steep drop in free cash flow undermines the company’s ability to reduce leverage, invest in capacity or return capital to shareholders. When cash generation lags earnings, the business has less buffer for capex, working capital swings or higher financing costs, raising structural risk.
Input-Cost ExposureMargins are structurally exposed to pulp and polymer input swings. In hygiene manufacturing, limited immediate pass-through to retail prices and long-term contracts can compress margins if raw-material inflation persists, creating sustained margin pressure absent offsetting pricing or efficiency gains.