📈 Company Growth and Financials
| Metric | Q3 FY25 | Q3 FY24 | YoY Growth | 9M FY25 | 9M FY24 | YoY Growth |
|---|---|---|---|---|---|---|
| Revenue | 401 | 501 | -20% | 1,205 | 1,503 | -20% |
| EBITDA | 44 | 134 | -67% | 185 | 463 | -60% |
| PAT | 12 | 82 | -86% | 81 | 301 | -73% |
🔍 Key Observations
- Declining revenue due to demand slowdown and pricing pressure.
- EBITDA margin shrunk from 27% to 11% YoY, indicating cost pressures.
- PAT fell sharply (-86% YoY) due to higher raw material costs and operational expenses.
The company is currently facing headwinds, requiring cost optimization and operational efficiency improvements.
📦 Order Book and Business Expansion
- Paper production capacity: 2,55,550 TPA.
- Upcoming expansion: ₹270 crore investment in tissue paper production (35,000 TPA capacity).
- Capex of ₹520 crore for plant modernization and efficiency improvement.
Expansion into tissue paper and modernization will drive future revenue growth despite short-term challenges.
🔮 Future Projections
- Growth drivers:
- Farm forestry initiative ensuring sustainable raw material supply.
- New tissue paper plant to diversify product portfolio.
- Expected 5-7% CAGR growth in India’s paper industry (FY23-25).
- Projected profit growth: High-margin tissue paper sales will improve profitability in FY26 onwards.
Medium-to-long-term outlook is positive, but FY25 remains challenging.
💰 Debt and Financial Health
| Metric | Q3 FY25 |
|---|---|
| Debt Level | ₹247 Cr (increased from ₹107 Cr in FY24) |
| Cash & Equivalents | ₹18 Cr (vs ₹11 Cr in FY24) |
Debt levels have increased, but manageable given capex investments.
🌍 Market Size and Opportunities
- India’s paper industry: 18-19 million MT, growing at 5-7% CAGR till FY25.
- Consumer packaging segment expected to grow 6-8% CAGR due to FMCG, pharmaceuticals, and e-commerce demand.
Andhra Paper is well-positioned to benefit from rising demand for sustainable packaging.
⚖️ Regulatory and Market Influences
- No major SEBI scrutiny or ASM listing concerns.
- Promoter Holding: Stable at 72.2% (West Coast Paper Mills Ltd.).
- Market challenges: Cost inflation and global economic uncertainty affecting demand.
Regulatory stability and strong promoter backing support long-term confidence.
📉 Technical Analysis
| Indicator | Correct Value & Trend |
|---|---|
| Resistance Levels | ₹75 – ₹80 |
| Support Levels | ₹65 – ₹68 |
| RSI (Relative Strength Index) | 48 (Neutral) |
| 50-day EMA | ₹72 |
| 200-day EMA | ₹69 |
| Stock Trend | Short-term: Sideways, Long-term: Bullish |
The stock is consolidating between ₹65 and ₹75 levels. A break above ₹80 could indicate a bullish breakout, while a fall below ₹65 may trigger further downside.
💡 Valuation & Investment Outlook
| Valuation Metric | Company | Industry Avg | Outlook |
|---|---|---|---|
| P/E Ratio | 8x | 12x | Undervalued |
| EV/EBITDA | 6x | 9x | Fairly Valued |
| Debt/Equity | 0.06 | 0.25 | Healthy |
At ₹70, the stock is trading below its intrinsic value, making it an attractive investment for long-term investors. However, short-term volatility may persist due to market conditions.
