Paper stocks have been rising in value over the first few days of July 2024. This is happening for a few key reasons.
Investors are optimistic about the paper industry’s potential for increased revenue. As per a few sources, experts predict that paper companies will see their revenues grow by 6-9 percent in FY25.
This growth is expected to come from the recent expansion of production capacity, which will allow paper companies to meet the increasing demand for their products.
Also, a recent government decision has greatly helped the paper industry. During the 53rd GST Council meeting, the Goods and Services Tax (GST) on paper boxes was reduced from 18 percent to 12 percent. This tax cut is expected to benefit the paper industry and contribute to its growth by lowering the overall costs associated with packaging materials.
For paper companies, lower production costs can translate to higher profit margins. Consumers, on the other hand, can expect lower product prices due to the cheaper packaging. This positive impact on both companies and consumers is expected to drive the growth of paper stocks.
Furthermore, positive market sentiment has been supported by recent increases in paper prices, anticipated strong earnings in Q1 FY24-25, and a proposal from the paper association to raise the basic customs duty (BCD) on paper and paperboard imports from 10 percent to 25 percent. This proposal follows a 34 percent increase in imports during FY23-24.
The paper industry’s performance closely correlates with key economic indicators such as literacy rates, education expenditure, and sales of fast-moving consumer goods (FMCG), all of which currently show favourable trends, enhancing confidence in paper stocks.
Here are some of the top-performing paper stocks that have seen significant gains over the past month of trading sessions:
JK Paper Limited
In Friday’s trading session, the shares of one of India’s largest Paper & Packaging Solutions companies surged by 1.6 percent on BSE to hit an intraday high at Rs. 597.95, as compared to its previous closing price of Rs. 588.55.
With a market capitalisation of Rs. 9,753.3 crore, the stock has delivered around 50 percent of positive returns in one month, while nearly 85 percent returns in the last one year.
In Q4 FY23-24, the company generated Rs. 1,718.6 crore in operating revenue, a 0.04 percent decrease from the Rs. 1,719.4 crore recorded in Q4 FY22-23. The net profit also fell by 1.7 percent reaching Rs. 278.6 crore, down from Rs. 283.52 crore in the same period of the previous fiscal year.
JK Paper Limited, formerly known as Central Pulp Mills, is the market leader in Branded Copier Paper in India and among the top producers of Coated Paper and Packaging Products in the country.
Pudumjee Paper Products Limited
In Friday’s trading session, the shares of Pudumjee Paper surged by 2.06 percent on BSE to hit an intraday high at Rs. 130.7, as compared to its previous closing price of Rs. 128.05.
With a market capitalisation of Rs. 1,203 crore, the stock has delivered around 42 percent of positive returns in one month, while nearly 207 percent of multibagger returns in the last one year.
In Q4 FY23-24, the company generated Rs. 205.3 crore in operating revenue, a 12.4 percent increase from the Rs. 182.7 crore recorded in Q4 FY22-23. The net profit also grew by around 248 percent reaching Rs. 37.4 crore, up from Rs. 10.75 crore in the same period of the previous fiscal year.
Pudumjee Paper Products Limited mainly belongs to the paper industry and operates in specialty paper business for wrapping and food grade packaging paper, household and sanitary paper.
Orient Paper and Industries Limited
In Friday’s trading session, the shares of a leading tissue paper manufacturer in India surged by 3.2 percent on BSE to hit an intraday high at Rs. 60.41, as compared to its previous closing price of Rs. 58.55.
With a market capitalisation of Rs. 1,239.6 crore, the stock has delivered around 31 percent of positive returns in one month, while nearly 44.3 percent of positive returns in the last one year.
In Q4 FY23-24, the company generated Rs. 242.4 crore in operating revenue, a 6.2 percent decline from the Rs. 258.5 crore recorded in Q4 FY22-23. The net profit also dropped from Rs. 49.95 crore to a loss of Rs. 6.42 crore, during the same period.
Incorporated in 1939, Orient Paper and Industries Limited, a CK Birla group company, is primarily engaged in the manufacture & sale of Paper, Electrical Consumer Durables, Chemicals, Industrial Blowers and Air Pollution Control Equipments.
Satia Industries Limited
In Friday’s trading session, the shares of one of the leading wood and agro-based paper manufacturer in India surged by 1.8 percent on BSE to hit an intraday high at Rs. 140.35, as compared to its previous closing price of Rs. 137.75.
With a market capitalisation of Rs. 1,383 crore, the stock has delivered around 28 percent of positive returns in one month, while nearly 21 percent of positive returns in the last one year.
In Q4 FY23-24, the company generated Rs. 430.6 crore in operating revenue, a 17.3 percent decline from the Rs. 520.64 crore recorded in Q4 FY22-23. The net profit also fell by 15 percent reaching Rs. 39.4 crore, up from Rs. 46.3 crore in the same period of the previous fiscal year.
Incorporated in 1980, Satia Industries Limited is presently engaged in the business of writing and printing paper, co-generation of power for captive consumption, solar power, trading activities in cotton & yarn and agricultural plantation & operations etc.
Written by Shivani Singh
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