Are Andhra Paper latest results good or bad?

The latest financial results for Andhra Paper indicate significant operational challenges. In the quarter ending September 2025, the company reported net sales of ₹362.08 crores, reflecting a decline of 16.24% year-on-year. This marks a continuation of a downward trend, as the previous quarter also experienced a sequential decline of 7.97%.
The company's net profit turned negative at ₹-20.26 crores, representing a substantial deterioration compared to the same period last year. This is the first quarterly loss for Andhra Paper in recent history, raising concerns about the sustainability of its operations. The operating margin also fell sharply to -1.88%, indicating that core manufacturing operations are currently loss-making.

The financial performance is further compounded by rising input costs and weak demand conditions in the paper sector, which have led to a comprehensive breakdown in operational profitability. The reliance on non-core income has diminished, and the company's cash flow from operations turned negative, suggesting emerging liquidity strains.

Additionally, the company's return on equity has weakened significantly, dropping to 4.25% on a trailing basis, down from a five-year average of 13.81%. This reflects a notable decline in capital efficiency.

In light of these results, Andhra Paper has experienced an adjustment in its evaluation, reflecting the challenges faced in the current operating environment. The outlook for recovery remains uncertain, contingent on improvements in sector demand and effective cost management strategies.