Financial Performance Overview
Andhra Paper Limited reported mixed FY26 results with record operational performance but significant profitability pressure. Revenue from operations grew 10.4% to ₹1,701.23 crores, driven by highest-ever production of 259,266 MT and sales of 260,438 MT. However, net profit declined 79.1% to ₹18.62 crores due to industry headwinds and increased costs, with EBITDA margin contracting to 8% from 14% in FY25.
Capital Expenditure and Modernization
The company completed a ₹915 crore modernization program over four years, including plant upgrades and de-bottlenecking totaling ₹520 crores. Significant progress was made on the RJ-3 Machine upgrade (₹178 crores) targeting March 2027 completion. The board approved entry into tissue paper manufacturing with ₹270 crore investment, with main equipment installation completed and trial runs commenced in May 2026. Commercial operations are expected in Q2 FY27 pending regulatory approvals.
Dividend and Corporate Actions
The Board recommended a final dividend of ₹0.50 per equity share (face value ₹2), with total dividend payout of ₹994 lakhs for FY26. The 62nd AGM is scheduled for August 11, 2026 through VC/OAVM, with record date set for August 4, 2026. The company paid fines of ₹1,10,920 each to NSE and BSE for delayed compliance, with appeal filed with Securities Appellate Tribunal.
Operational and ESG Initiatives
Andhra Paper maintained strong operational metrics with 99.97% capacity utilization across its two manufacturing units. The company demonstrated comprehensive ESG commitment through farm forestry covering 9,574 hectares, engaging approximately 5,000 farming families and generating 47.87 lakhs person-days of rural employment. Environmental performance showed 10.4% improvement in water intensity and 28.3% renewable energy consumption.
Financial Position and Controls
Total assets stood at ₹2,538.09 crore with borrowings reduced 19.4% to ₹223.79 crore and cash equivalents increased to ₹16.17 crore. Auditors MSKA & Associates LLP issued an unmodified opinion, confirming adequate internal financial controls operating effectively. The company maintained ICRA ratings of AA (Stable) for long-term facilities and A1+ for short-term facilities.
Contingencies and Disputes
The company faces multiple tax disputes totaling ₹2,357.43 lakhs across income tax (₹291.09 lakhs), excise duty (₹566.24 lakhs), sales tax (₹600.29 lakhs), and electricity duty (₹1,571.62 lakhs). Provisions for contingencies stood at ₹109.07 crore and for disputed dues at ₹235.74 crore. Subsequent events include an illegal strike and lockout at Kadiyam Unit from May 1, 2026, causing production disruptions.