Andhra Paper reported a 42.25% year-on-year increase in net profit to ₹3,031.57 lakh for the quarter ended June 30, 2026 (Q1FY27), driven by a significant expansion in EBITDA margins to 12.39% from 8.54% in the prior-year period. Revenue from operations remained stable at ₹39,377.13 lakh, compared to ₹39,342.06 lakh in Q1FY26, while operational efficiency gains offset partial production losses at its Kadiyam unit due to labor unrest. The resilience of profitability amidst operational disruptions highlights improved cost management efficiency, offering positive signals for shareholder value despite temporary capacity constraints.

Financial Performance

The Board of Directors, meeting on August 4, 2026, approved the unaudited financial results for Q1FY27. The statutory auditors, M/s. MSKA & Associates LLP, issued an unmodified limited review report on the results pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

*EBITDA derived from disclosed margin expansion of 12.39% applied to revenue.

Revenue from operations stood at ₹39,377.13 lakh, a marginal increase of 0.09% over ₹39,342.06 lakh in Q1FY26. Total income rose to ₹41,542.62 lakh from ₹42,064.68 lakh, primarily due to lower other income of ₹2,165.49 lakh compared to ₹2,722.62 lakh in the previous year.

Profit before tax increased significantly to ₹4,054.56 lakh from ₹2,916.91 lakh. Total expenses decreased to ₹37,488.06 lakh from ₹39,147.77 lakh, driven by a reduction in cost of materials consumed to ₹24,486.15 lakh from ₹27,582.45 lakh, and lower finance costs of ₹290.00 lakh versus ₹575.69 lakh.

Operational Update

Operations at the Company’s Kadiyam Unit were temporarily suspended from April 27, 2026, following an illegal strike by contract workmen. A lockout declared on May 1, 2026, was revoked on May 29, 2026. Manufacturing operations partially resumed on July 15, 2026, with the unit currently operating at approximately 93% of normal capacity. Management continues to take measures to restore full operations.

What the Numbers Show

Despite operating below full capacity for part of the quarter, Andhra Paper achieved substantial margin expansion. The decline in material costs and finance charges contributed to a higher profit before tax even as revenue remained flat. The resilience of profitability amidst operational disruptions highlights improved cost management efficiency.

Andhra Paper Limited has resumed operations of a second paper machine at its Kadiam unit effective July 23, 2026, increasing the facility's aggregate operational production capacity to approximately 93% of its normal level. The restart follows an earlier partial resumption on July 15, 2026, when one paper machine with a capacity of 150 MT per day was restored. The latest development involves the commencement of a second machine with a production capacity of 55 MT per day, marking significant progress towards full normalisation after a disruption caused by contract workmen demands regarding contractual terms.

The company confirmed that there is no physical damage to assets and that all insurable assets are adequately covered. Consequently, no quantifiable loss or damage has been reported. While permanent employees have returned to their shift schedules, the attendance of contract workmen had previously lagged at around 35% of normal strength, causing operational constraints. The improved capacity suggests a resolution to these staffing bottlenecks is underway.

Operational Status at Kadiam Unit

The following table outlines the updated operational parameters at the Kadiam unit located in East Godavari, Andhra Pradesh:

Andhra Paper continues to implement necessary operational measures to stabilise production and restore full operations at the earliest. The company stated that it will inform the stock exchanges of any further material developments in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.