At a Glance
Andhra Paper just posted a Q1 FY26 profit of ₹21 crore, which is technically better than losing money – but barely. Sales fell 7% YoY to ₹393 crore, and operating margins crawled up to 9%, still far from industry peers. The stock trades at ₹76.7 with a P/E of 18.5 and a Book Value higher than its market cap, making it look like a “value buy” – until you realize growth is in hibernation.
Introduction
Once upon a time, Andhra Paper was the pride of Rajahmundry’s paper mills, churning out maplitho and copier sheets faster than students could waste them. Fast forward to FY26, and the company’s fortunes have yellowed like an old office file. Revenue growth is nearly flat, margins are wafer-thin, and the only thing expanding is the cost of raw materials. Yet, management seems confident enough to announce a ₹178 crore capex – a brave move or a last roll of the dice?
Business Model (WTF Do They Even Do?)
- Products: Writing & Printing Papers, Copier Papers, and Paper Boards.
- Markets: Primarily domestic, with occasional export shipments.
- USP: Integrated pulp production – fewer imports, but still vulnerable to wood pulp price swings.
- Strategy: Capacity expansion, cost optimization, and clinging to any demand uptick in education and packaging sectors.
Reality: It’s a commoditized business where price wars and input costs decide profits.
Financials Overview
Q1 FY26 (YoY):
- Revenue: ₹393 Cr (-7%)
- EBITDA: ₹34 Cr (+70%, but low base)
- PAT: ₹21 Cr (+162%, again low base)
- EPS: ₹1.07
FY25:
- Revenue: ₹1,541 Cr (-14%)
- PAT: ₹89 Cr (-74%)
- EPS: ₹4.47
Fresh P/E: 76.7 / 4.47 ≈ 17.1. Cheap? Only if you ignore
