The agency has also affirmed the company’s short-term rating at ‘[ICRA] A1+’.
ICRA stated that the ratings reaffirmation of West Coast Paper Mills (WCPL) considers expectation that the company’s satisfactory credit profile would continue in FY2026, supported by its robust capacity utilisation level and strong liquidity position.
The ratings also factor in the established market position of WCPL and its subsidiary, Andhra Paper (APL), in the domestic writing and printing paper (WPP) industry, WCPL’s capabilities in manufacturing a variety of wood-free paper, cupstocks, special grade papers, among others.
Besides, its integrated nature of operations with adequate in-house capacity to manufacture virgin pulp, along with their captive power plants provide comfort.
The ratings also consider the comfortable financial profile of WCPL, marked by low dependence on debt and large cash and liquid investments, translating into continued cash surplus position for the company.
In H1 FY2026, the top line remained flat compared to H1 FY2025, with the OPM further moderating to 8.9% from 15.8% in H1 FY2025 due to increased raw material costs, especially wood, and continued pressure on net sales realisation owing to influx of cheaper imports.
Further, APL witnessed operational challenges like labour strike and undertook annual maintenance shutdown in Q2 FY2026, which significantly impacted its operating margins during the said quarter.
Notwithstanding this, WCPL maintained its cash surplus position in FY2025 and H1 FY2026 with cash reserves (net of debt) at over Rs 1,300 crore as of September 2025.
Going forward, a stable demand environment and integrated nature of operations would aid WCPL in sustaining its overall financial profile, though the movement in net sales realisation would be monitored.
The ratings, however, remain constrained by the vulnerability of revenues and profit margins to net sales realisation of paper, which has been volatile recently, along with the susceptibility of profit margins to raw material and fuel prices.
Also, with imports accounting for a large portion of domestic demand, local prices are largely determined by global trends in paper prices. While the long-term demand remains favourable because of lower per-capita domestic paper consumption (compared to global standards), rising digitisation remains a key headwind for the sector.
The ratings also consider the risks related to raw materials in the paper manufacturing business because of the environmental regulations on availability and industrial usages of wood and water, which are two critical inputs in the manufacturing process.
West Coast Paper Mills (WCPL) is the flagship entity of the S K Bangur Group, based out of Kolkata. WCPL produces writing and printing papers, cupstocks etc. from its 3.2 lakh metrictonne per annum (MTPA) paper manufacturing plant located in Dandeli, Karnataka. WCPL acquired a 72% stake in International Paper APPM in FY2020 and subsequently changed the name of the company to Andhra Paper Mills.
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