Andhra Paper margin drops 5.62 points as costs outpace revenue
Revenue rose 8.20% qoq, but higher expenses and interest left net profit down 85.92%; other income exceeded reported pre-tax profit.
Filed 30 Oct 2026, 16:34 IST · after market close · Andhra Paper Ltd (ANDHRAPAP)
Key takeaways
- Standalone net profit fell 85.92% QoQ despite revenue growth of 8.20%.
- Expenses grew 15.14% against 8.20% revenue growth, narrowing operating margin by 5.62 percentage points.
- Other income equalled 171.68% of profit before tax, making reported profit quality unusually dependent on non-operating income.
Price around the results
Higher revenue did not prevent a sharp profit decline
Andhra Paper’s standalone revenue increased 8.20% QoQ, but net profit declined 85.92% as operating profit fell 40.89%. Profit before tax dropped 85.89%, while EPS declined 86.18% to Rs 0.21. The results were filed after market close, so the stock’s response is not yet part of this note.
Costs and interest drove the margin squeeze
Expenses grew 15.14%, faster than revenue, reducing operating margin by 5.62 percentage points to 6.77%. Interest expense rose 84.14% QoQ, adding to the pressure after operating profit had already weakened. Depreciation increased 2.26%, a smaller but additional cost increase.
Margin fell below the commodities peer median
The 6.77% operating margin was 8.56 percentage points below the 15.33% median for 54 commodities peers that had reported the same quarter. Andhra Paper ranked ninth from the bottom on this measure. This was a sequential deterioration from the previous quarter’s 12.39% margin, though the available trend covers only the prior quarter.
Other income made up more than pre-tax profit
Other income declined 54.64% QoQ, yet still represented 171.68% of profit before tax because operating earnings were heavily reduced. The tax rate was broadly unchanged, rising 0.18 percentage points, so the profit decline was driven mainly by weaker operating profit, higher interest and lower other income rather than a tax-rate change.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹426 cr | ₹394 cr | +8.20% |
| Other income | ₹10 cr | ₹22 cr | -54.64% |
| Expenses | ₹397 cr | ₹345 cr | +15.14% |
| Operating profit | ₹29 cr | ₹49 cr | -40.89% |
| Operating margin (%) | 6.77% | 12.39% | — |
| Interest | ₹5 cr | ₹3 cr | +84.14% |
| Depreciation | ₹28 cr | ₹27 cr | +2.26% |
| Profit before tax | ₹6 cr | ₹41 cr | -85.89% |
| Tax | ₹1 cr | ₹10 cr | -85.83% |
| Net profit | ₹4 cr | ₹30 cr | -85.92% |
| EPS (₹) | ₹0.21 | ₹1.52 | -86.18% |
Operating margin of 6.77% compares with a Commodities sector median of 15.33% across 54 peers that have reported Q2FY27.
What to watch
- Whether operating margin recovers from 6.77% after the 5.62 percentage-point QoQ decline.
- Whether expense growth moves below the 15.14% recorded QoQ, against revenue growth of 8.20%.
- Whether other income remains a material contributor after representing 171.68% of profit before tax.