Are Andhra Paper Ltd latest results good or bad?

Andhra Paper Ltd's latest financial results for the quarter ended December 2025 reveal a complex picture of operational performance. The company reported a net sales figure of ₹418.69 crores, reflecting an 8.55% year-on-year growth, which is a notable recovery from the previous year's decline. However, this revenue growth did not translate effectively into profitability, as the operating profit margin (excluding other income) fell to 3.68%, a significant contraction from the 7.34% margin recorded a year prior. The net profit for the quarter was ₹9.85 crores, which represents a decline of 15.45% compared to the same quarter last year. This decline in net profit, coupled with a decrease in the profit after tax (PAT) margin to 2.35%, indicates challenges in converting revenue growth into bottom-line results. Furthermore, the company's reliance on non-operating income has become increasingly pronounced, accounting for a staggering 235.80% of profit before tax, suggesting that core operations are struggling to generate sustainable profits. Additionally, the company has faced rising operational costs, particularly in employee expenses, which have outpaced revenue growth. This has contributed to the overall margin compression observed in the latest results. On the balance sheet front, Andhra Paper's long-term debt has risen sharply, reflecting increased financial strain and potential liquidity challenges. The company's cash flow statement indicates negative operating cash flow, driven by adverse movements in working capital, which further complicates its financial health. In summary, while Andhra Paper Ltd has shown positive revenue growth, the underlying operational trends reveal significant challenges, including declining profitability margins and an unsustainable reliance on non-operating income. The company has experienced an adjustment in its evaluation, reflecting these operational difficulties and the broader context of rising debt and working capital pressures.