According to reports from Business Standard and Moneycontrol, Andhra Paper reported a 1.7% decline in net profit to ₹7.72 crore in Q4 FY26, despite achieving strong revenue growth. The company's net sales surged 29.4% YoY to ₹527.05 crore compared to the same quarter in the previous fiscal year. Total operating expenses for the period under review were ₹501.94 crore, up 29.7% YoY, while interest outgo decreased significantly to ₹3.71 crore, down 48.9% YoY in the March 2026 quarter. However, the quarter presented a stark contrast between top-line momentum and bottom-line profitability, with operating margins compressing significantly from 4.98% in Q4 FY25 to 4.76% in the latest quarter. The company's basic earnings per share (EPS) stood at ₹0.39, down from ₹0.50 in the previous year, reflecting the impact of margin pressures on profitability.
As reported by Business Standard, the company's profit before tax stood at ₹11.76 crore, representing a substantial 90.6% increase from ₹6.7 crore recorded in Q4 FY25. This strong performance in profit before tax indicates improved operational efficiency despite the marginal decline in net profit, suggesting better cost management and operational leverage during the quarter. However, the quarterly revenue performance of ₹527.05 crores marked the highest sales figure in the company's recent history, representing a robust 25.88% sequential improvement from ₹418.69 crores in Q3 FY26, though this top-line expansion failed to translate into proportionate profit growth with net profit declining 21.63% quarter-on-quarter from ₹9.85 crores.
According to the company's annual results reported by Business Standard, for FY26, Andhra Paper recorded net profit of ₹18.62 crore, up 79.1% YoY, and revenue from operations of ₹1,701.23 crore, up 10.4% YoY. The company's annual performance demonstrates consistent growth momentum across both profitability and revenue metrics, with the significant improvement in net profit indicating enhanced operational efficiency and market positioning. However, the five-year sales growth of 14.49% demonstrates reasonable top-line momentum, but this has been accompanied by a concerning five-year EBIT growth of -227.72%, highlighting severe profitability challenges that require urgent management attention.
The quarterly results reveal mounting operational challenges in the paper manufacturing segment, where raw material inflation and competitive pricing pressures continue to erode value creation. As reported by Business Standard, gross profit margin deteriorated to 7.37% from 7.53% year-on-year, while PAT margin contracted from 1.93% to 1.46%, with operating profit before depreciation, interest, tax, and other income standing at ₹25.11 crores, yielding a margin of 4.76%—substantially lower than the 12.10% achieved in September 2024. The significant contribution from other income, which amounted to ₹17.46 crores—representing 148.47% of profit before tax, raises concerns about the sustainability of core business profitability and the quality of earnings. Raw material consumption increased to ₹288.39 crore from ₹284.49 crore year-on-year, while employee costs rose to ₹47.04 crore from ₹47.35 crore, indicating rising operational expenses despite revenue growth.
As reported by Business Standard, the company's stock performance reflected mixed investor sentiment following the quarterly results. The scrip fell 1.90% to currently trade at ₹63.40 on the BSE, indicating some market caution despite the company's strong annual performance and improved operational metrics. The stock has declined 35.31% from its 52-week high of ₹98.00, with the company currently valued at ₹1,271 crores. The proprietary Mojo Score of 41 out of 100 places the stock firmly in "Sell" territory, reflecting concerns across valuation, quality, and technical parameters. The stock has underperformed its sector benchmark by 13.69 percentage points over the past year, with the stock declining 18.70% compared to the Paper, Forest & Jute Products sector's 5.01% decline. The enterprise value-to-EBITDA multiple of 14.34 times appears elevated for a company experiencing margin contraction, while the negative EV-to-EBIT ratio of -21.19 times reflects the operational challenges.
