Paper stocks in focus: JK Paper share price jumps 10% on robust Q1 numbers; West Coast Paper, Andhra Paper among others gain up to 17%

Paper stocks in focus: At least a dozen of paper manufacturing and distributing companies’ shares zoomed up to 17.5 per cent on the BSE intraday during Monday’s session on the back of heavy volumes. The surge in these paper stocks is a cascading effect due to the surge in JK Paper shares amid robust June-quarter earnings. 

JK Paper reported a growth of 152 per cent year-on-year (YoY) in consolidated profit to Rs 261.98 crore during the first quarter of the financial year 2022-23 (Q1FY23), while its revenue came at Rs 1,430 crore, up 116.5 per cent YoY. 

The paper company’s EBITDA (earnings before interest, tax, dividend, and amotisation) doubled in Q1FY23 to Rs 458.09 crore from Rs 224.51 crore YoY. The robust performance came amid higher production, sales volume, and enhanced sales realisation, aided by a good product mix, JK Paper said. 

The company's MD and VP Harsh Pati Singhania said, “The growth is in spite of the adverse impact of a substantial increase in major input costs in the recent period. Demand for paper and board remains strong. The new packaging board line has stabilised well and achieved high-capacity utilization.”  

Shares of JK Paper surged nearly 10 per cent to Rs 380.5 per share on the BSE intraday on Monday, it is trading near to its 52-week high of Rs 387.40 touched on April 18, 2022.  

While other market leaders in the paper segment such as West Coast Paper Tamil Nadu Newsprint and Andhra Paper each hit their respective 52-week highs of Rs 497.65, 242.85, 399.9 per share, after gaining between 10-17.5 per cent on the BSE intraday on Monday. 

Similarly, other scrips like Orient Paper, Ruchira Paper, Pudumjee Paper, Nath Industries, Star Paper Mills, South India Paper, Emami Paper, and Balkrishna Paper each spurted between 4-14 per cent on the BSE intraday today. 

According to Centrum Broking, “With the impact of pandemic receding schools, colleges, offices, and courts have opened full-fledged. Distributors have started stocking inventory with uptick in demand, also, an inflationary trend has led to higher-than-normal demand at the distributor level.”