- Date : 08/09/2023
- Read: 3 mins
Paper stocks like JK paper, Andhra, and West Coast soar by 15% due to a significant rise in domestic and international demand for paper.
On 6th September (Wednesday), paper stocks were on a high scale in the trading session. With double-digit gains in a volatile session, paper stocks showed their potential to reach 50 per cent upside over the next year, says Anirudh Garg (Partner and head of research at Incasset PMS). On Wednesday, paper stocks rallied up to a 15 per cent high value while Sensex was down by 0.20 per cent.
The experts' top picks are JK Papers, Balkrishna Paper Mills, and West Coast, as these stocks gave all-time high returns of up to 15 per cent.
Factors like the Make in India campaign have boosted paper production and will be given great focus in the future.
The Indian paper industry is expected to rise due to strong domestic demand and strategic exports.
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What’s an optimistic outlook on the paper stocks hiked up to 15%?
The West Coast Paper and Andhra Paper both zoomed up to 14.7 per cent and 15 per cent, respectively, scaling to one-year highs. Several other paper companies like Orient Paper and Industries, Seshasayee Paper and Boards, Pudumjee Paper Products, etc., rolled their best hits to 13-17 per cent. NR Agarwal Industries and JK Paper hit over 7 per cent to scale all-day highs of RS 373.30 and RS 402.50, respectively. Some companies like Shree Rama Newsprint, Star Mills, Nath Industries, etc., rallied between 5 to 9 per cent.
Tamil Nadu Newsprint and Papers (TNPL) points out ‘Make In India’ as a key driver of paper demand over the coming years. Exports of paper and converted paper products are expected to rise. TNPL also mentioned that after the pandemic, the demand has been increasing, offices are re-opening, and the population is rising, boosting paper production.
Furthermore, Vaibhav Kaushik commented that after the G20 summit, the One Nation One election will be the main agenda in the special session of Parliament. Due to this, the demand for papers would be high in the coming elections.
What factors are contributing to the industry buzz?
Lifting of European Union’s ban on paper exports to India
This increases the access to raw materials for Indian paper manufacturers. Due to this, many manufacturers started producing at full capacity.
Government initiatives and campaign
Indian government’s initiatives like the Make In India campaign have boosted domestic production, generating employment opportunities and innovations.
Ban on single-use plastics
The recent ban on single plastics promoted the production of paper-based industries. Businesses are adopting an eco-friendly alternatives like paper straws, cups, bags, and other packaging options.
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Disclaimer: This article is intended for general information purposes only and should not be construed as insurance or investment or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.