Andhra Paper Revenue Up, Profit Plummets Amid Rising Costs

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AuthorAnanya Iyer|Published at:
Andhra Paper Revenue Up, Profit Plummets Amid Rising Costs
Overview

Andhra Paper Limited reported a mixed Q3 FY26. While revenue from operations rose 8.55% year-on-year to ₹41,868.62 Lakhs, profitability suffered significantly. Profit Before Tax (PBT) dropped 28.68% YoY to ₹1,217.84 Lakhs, and Net Profit After Tax (PAT) fell 15.45% to ₹984.89 Lakhs. For the nine-month period, PAT saw a drastic 86.53% YoY decline, illustrating severe margin pressure. Increased expenses, particularly material costs and labour code impacts, are cited as key drivers.

📉 The Financial Deep Dive

Andhra Paper Limited's latest unaudited financial results for the quarter and nine months ended December 31, 2025, reveal a stark divergence between top-line growth and bottom-line performance.

The Numbers:

  • Quarterly (Q3 FY26 vs. Q3 FY25): Revenue from operations climbed 8.55% year-on-year to ₹41,868.62 Lakhs from ₹38,570.20 Lakhs. Total Income also saw a healthy increase of 11.58% to ₹44,740.88 Lakhs. However, this revenue growth did not translate into profit. Profit Before Tax (PBT) plummeted by 28.68% to ₹1,217.84 Lakhs (from ₹1,707.46 Lakhs), and Net Profit After Tax (PAT) declined by 15.45% to ₹984.89 Lakhs (from ₹1,164.87 Lakhs). Consequently, Basic and Diluted EPS fell to ₹0.50 from ₹0.59.

  • Nine-Month (9M FY26 vs. 9M FY25): The trend of declining profitability was more pronounced over the nine-month period. Revenue from operations grew 3.56% to ₹1,17,418.61 Lakhs. Total Income increased by 3.04% to ₹1,24,031.60 Lakhs. Despite this revenue growth, PBT saw a catastrophic drop of 87.73% to ₹1,359.97 Lakhs (from ₹11,090.62 Lakhs). PAT followed suit, collapsing by 86.53% to ₹1,089.20 Lakhs (from ₹8,105.66 Lakhs). This resulted in a sharp fall in Basic and Diluted EPS to ₹0.55 from ₹4.08.

The Quality & Drivers:

The significant decline in profitability, especially over the nine-month period, is primarily attributed to a surge in expenses. Key cost heads that saw an increase include the cost of materials consumed, employee benefits expense, and depreciation and amortisation expense. Furthermore, the company noted the recognition of the incremental impact of the newly consolidated Labour Codes from November 21, 2025, which affected current period expenses. This indicates potential structural cost increases that investors need to monitor.

The Grill & Outlook:

Management provided no specific forward-looking guidance or outlook in this announcement, which is a concern given the drastic profit decline. The absence of a clear strategy or targets for margin recovery leaves investors uncertain about future performance. The statutory auditors have issued an unmodified report, suggesting no major accounting irregularities, but the underlying operational cost pressures remain a significant concern. The market will be watching for management commentary on cost control measures and potential price increases to offset rising expenses in future quarters.

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