Unable to add application to group with application credentials

Steps to reproduce:

1) Create a new AD appliaction(say adminapp)

2) Go to configure page-> Permissions to other applications and add "Windows Azure Active Directory"

3) Get the app Id and key of this newly created app(adminapp)

4) Create 1 more application(sampleapp) and 1 group(samplegroup)

5) Using the application credentials of adminapp, use Grapclient to addsamplegroup to sampleapp.

6)This fails with an exception"Unable to add application to a group :Microsoft.Data.OData.ODataErrorException: Insufficient privileges to complete the operation. ---> System.Data.Services.Client.DataServiceRequestException: An error occurred while processing this request. ---> System.Data.Services.Client.DataServiceClientException: {"odata.error":{"code":"Authorization_RequestDenied","message":{"lang":"en","value":"Insufficient privileges to complete the operation."}}}"

This worked earlier. But failing for the past 2 days.