I've redone Mannlicher-Schoenauer stocks before, and I wouldn't think of touching a stock, in the condition described, with sandpaper.
I would use Formby's Furniture Restorer, a liquid stripper, to remove/wipe-off the varnish via following the can directions with a new pad of OOOO steel wool, followed up with dent raising and an oil finish.
I would use a stain only in light-colored areas (if any) or if the stock's overall color when stripped was too light for my taste.
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