Andhra Paper reported record production and sales volumes in FY26, with revenue up to ₹1,693 crore. However, net profit dropped significantly to ₹18.62 crore from ₹88.91 crore due to high input costs and fixed charges.
Andhra Paper FY26 Results
Andhra Paper's revenue for FY26 reached ₹1,692.98 crore, a rise from ₹1,522.27 crore in FY25, driven by record sales volumes. However, the company's net profit saw a significant decline, falling to ₹18.62 crore from ₹88.91 crore in the previous fiscal year.
Reader Takeaway: Record volumes masked by cost pressures and margin decline.
What just happened
Andhra Paper announced its financial results for the fiscal year ending March 31, 2026 (FY26). The company achieved its highest-ever annual paper production at 2,59,266 metric tonnes (MT) and sales of 2,60,438 MT. Revenue increased to ₹1,692.98 crore. However, EBITDA decreased to ₹150.89 crore from ₹223.29 crore in FY25, and net profit plummeted to ₹18.62 crore from ₹88.91 crore.
Why this matters
The results highlight a divergence between operational success and financial performance. While record sales volumes showcase operational efficiency and the benefits of a recently completed modernisation program, the drop in profitability underscores significant challenges from rising input costs and increased fixed charges. This signals potential margin pressure in the near term despite capacity expansion.
The backstory
The company recently concluded a four-year capital expenditure program involving an investment of approximately ₹915 crore. This program focused on modernising manufacturing facilities and included the commissioning of a Precipitated Calcium Carbonate (PCC) facility. This investment cycle has led to higher depreciation and finance costs in the current fiscal year.
What changes now
Andhra Paper is strategically shifting its focus towards the high-growth tissue and hygiene segment. A 35,000 TPA facility for this segment is expected to start commercial operations in the second quarter of FY 2026-27. The management aims to generate superior returns from the recently completed investments and explore new, potentially higher-margin product lines.
Risks to watch
A significant concern is the labor unrest, evidenced by a lockout at the Kadiyam Unit effective May 1, 2026. This could disrupt production and impact early FY27 results. Additionally, ongoing margin pressure due to high input costs and competitive import pricing remains a key challenge.
Peer comparison
While specific peer data for FY26 was not provided in the filing, the paper industry globally faces challenges from fluctuating raw material costs and import competition. Companies in this sector often invest in modernisation and diversification to maintain competitiveness.
Context metrics (time-bound)
- FY26 Paper Production: 2,59,266 MT (Record high)
- FY26 Paper Sales: 2,60,438 MT (Record high)
- FY26 Revenue: ₹1,692.98 crore (Up from ₹1,522.27 crore in FY25)
- FY26 EBITDA: ₹150.89 crore (Down from ₹223.29 crore in FY25)
- FY26 Net Profit: ₹18.62 crore (Down from ₹88.91 crore in FY25)
- Total Capex: ₹915 crore over four years
- PCC Facility Capacity: 43,000 TPA
- Tissue Facility Capacity: 35,000 TPA (Expected FY27 Q2)
- Kadiyam Unit Lockout: Effective May 1, 2026
What to track next
Investors will be looking for updates on the resolution of the labor dispute at the Kadiyam unit. Furthermore, performance metrics for the new tissue and hygiene segment, along with any signs of margin recovery in traditional paper products, will be crucial to monitor.