Andhra Paper experiences head winds

Andhra Paper experienced a financial reversal in the second quarter of the fiscal year, reporting a net loss of INR 20.26-crore. This figure marks a significant swing from the INR 41.72-crore net profit after tax (PAT) reported in the corresponding quarter of the previous year. Sequentially, the Q2 loss also represented a sharp decline from the INR 21.31-crore profit recorded in the preceding quarter (Q1 FY26).

The intense pressure was felt across the first half of the year, where the company's total PAT for H1 FY26 collapsed by approximately 98.5% year-over-year to stand at just INR 1.04-crore, down from INR 69.41-crore in the previous year at the same time.

The company attributed the steep decline in earnings directly to multiple operational disruptions at its manufacturing facility in Rajahmundry, all occurring within the critical month of July 2025. This period began with an illegal workers' strike on 6 July 2025, which demanded a wage settlement revision. To safeguard assets and personnel, the company announced a lockout at the plant on 11 July. Prompt action led to a resolution, with both management and the trade union calling off the strike and lockout on 12 July, allowing normal operations to resume shortly thereafter.

However, immediately following the brief stoppage, production and earnings were further impacted by a planned annual outage for routine maintenance. This scheduled downtime at the Rajahmundry facility ran for 14 days, from 13 to 26 July 2025. The cumulative effect of the illegal strike, the subsequent lockout, and the planned maintenance outage placed severe, compounding pressure on the company's production and profit-generating capacity during Q2.

Andhra Paper remains focused on the business of manufacturing and sale of pulp, paper, and paperboards, which it considers its single operating segment.

When last reported by PrintWeek, Andhra Paper has a total production capacity of 2,59,400 TPA (tons per annual) for paper and 2,00,000 MTPA for virgin pulp. The company operates two main facilities: the Rajahmundry unit, which is currently operating at full capacity, and the Kadiyam unit, which has a capacity of 36,000 TPA. Additionally, there are plans to invest INR 178-crore to increase the capacity of the Rajahmundry facility by 60%. As per media reports, APL is undertaking two major capital expenditure (capex) projects. This includes, the replacement of older technology with an automated film press, and upgrading the Kadiyam paper machine. The second project is the installation of a tissue paper plant at Kadiyam. 

Andhra Paper (once known as International Paper APPM and The Andhra Pradesh Paper Mills) was incorporated in 1964 at Rajahmundry in Andhra Pradesh for manufacturing of paper by the LN Bangur group.  In 2019, the West Coast Paper Mills (WCPM) acquired 72.2% of the equity stake in APL for a consideration of INR 911.09 crore. West Coast Paper Mills (WCPM) was established in 1955 and is the flagship company of Kolkata based SK Bangur Group