Current Rating Overview
MarketsMOJO’s Strong Sell rating for Andhra Paper Ltd indicates a cautious stance for investors, suggesting that the stock is expected to underperform relative to the broader market. This rating is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. The rating was revised on 07 Nov 2025, when the Mojo Score dropped from 31 (Sell) to 15 (Strong Sell), reflecting a significant deterioration in the company’s fundamentals and market performance.
Quality Assessment
As of 23 January 2026, Andhra Paper Ltd holds an average quality grade. This suggests that while the company maintains some operational stability, it faces challenges in sustaining growth and profitability. The long-term growth outlook is particularly concerning, with operating profit having declined at an annualised rate of -180.17% over the past five years. This negative trajectory highlights structural issues within the business that have yet to be resolved.
Valuation Considerations
The valuation grade for Andhra Paper Ltd is classified as risky. Currently, the stock trades at levels that imply elevated risk compared to its historical averages. Investors should note that the company’s net sales have fallen by -16.24%, and operating profits remain negative. This combination of declining revenues and losses places pressure on the stock’s valuation multiples, making it less attractive from a price perspective.
Financial Trend Analysis
The financial trend for Andhra Paper Ltd is very negative as of today. The company has reported negative results for eight consecutive quarters, signalling persistent operational difficulties. Operating cash flow for the year stands at a low of ₹-55.39 crores, while interest expenses for the first nine months have increased by 61.84% to ₹17.22 crores. Profit before tax excluding other income has fallen sharply by -238.03% in the latest quarter, underscoring the deteriorating profitability. These metrics collectively indicate a weakening financial position that weighs heavily on investor confidence.
Technical Outlook
From a technical perspective, Andhra Paper Ltd is rated bearish. The stock has underperformed key benchmarks such as the BSE500 over multiple time frames, including the last three years, one year, and three months. Recent price movements show a decline of -0.30% on the day, -5.68% over the past month, and a significant -28.17% over the last year. This downward momentum reflects negative market sentiment and limited buying interest, reinforcing the Strong Sell recommendation.
Stock Returns and Market Performance
As of 23 January 2026, Andhra Paper Ltd’s stock returns have been disappointing across all measured periods. The stock has delivered a -28.17% return over the past year and a -18.46% return over six months. Year-to-date performance also remains negative at -4.65%. These returns lag behind broader market indices, highlighting the stock’s underperformance and the challenges faced by the company in regaining investor favour.
Implications for Investors
The Strong Sell rating signals that investors should exercise caution with Andhra Paper Ltd. The combination of average quality, risky valuation, very negative financial trends, and bearish technicals suggests that the stock is currently not a favourable investment. Investors seeking capital preservation or growth may find better opportunities elsewhere, given the company’s ongoing operational and financial struggles.
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Sector and Market Context
Operating within the Paper, Forest & Jute Products sector, Andhra Paper Ltd faces sector-specific challenges including fluctuating raw material costs, demand variability, and competitive pressures. The company’s smallcap status further exposes it to liquidity and volatility risks. Compared to peers, Andhra Paper Ltd’s financial and operational metrics lag significantly, which is reflected in its current rating and market performance.
Summary of Key Financial Metrics
As of 23 January 2026, the company’s operating cash flow is deeply negative at ₹-55.39 crores, indicating cash burn and operational inefficiencies. Interest expenses have risen sharply, increasing the financial burden. The persistent negative profit before tax and declining net sales highlight ongoing challenges in generating sustainable earnings. These factors collectively justify the Strong Sell rating and caution investors about the stock’s outlook.
Conclusion
Andhra Paper Ltd’s current Strong Sell rating by MarketsMOJO reflects a comprehensive assessment of its deteriorating fundamentals, risky valuation, negative financial trends, and bearish technical signals. Investors should carefully consider these factors before allocating capital to this stock. While the company operates in a traditional sector with potential for recovery, the present data as of 23 January 2026 suggests significant headwinds remain. Prudent investors may prefer to monitor the stock closely for any signs of turnaround before considering exposure.
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