Did you ever try flying paper planes or making paper boats during your childhood days, spending memorable moments with your friends? Well, we know that almost everyone did these activities at least once in their childhood.
In the past, we used paper products for festival decorations and craft classes at school. Nowadays, plastic products have replaced many of the paper products we used to use.
Even today, instead of spending money on buying physical books or novels, we often prefer e-books that can be easily carried on our smartphones and accessed anytime, anywhere.
Due to digitalisation, the use of paper and paper products has decreased, but it’s still hard to imagine life without them.
According to the Indian Paper Manufacture Association, India’s paper industry constitutes approximately 5% of the world’s paper production, with an estimated turnover surpassing Rs 80,000 crore. The industry contributes about Rs 5,000 crore to the exchequer and offers direct employment to 500,000 individuals, indirectly supporting around 1.5 million more.
India’s per capita paper usage, at approximately 15 kg, significantly trails the global average of 57 kg. Emerging as the world’s fastest-expanding paper market, India is on the cusp of substantial paper consumption growth congruent with economic expansion. Forecasts indicate that paper consumption growth could surpass GDP expansion, suggesting that a one kg per capita consumption increase might result in a demand surge of 1 million tonnes.
Below is a list of stocks within the Paper Industry, which aligns with the net profit reported by these companies during Q1 FY24:
| Company Name | CMP Rs | Market Cap Rs in Cr | P/E (x) | Revenue Q1 FY24 Rs in Cr | OPM Q1 FY24 % | Net Profit Q1 FY24
Rs in Cr |
3mth return % | 1Yr return % |
| JK Paper | 366.75 | 6212.84 | 4.91 | 1584.36 | 30.12 | 312.56 | -1.12 | -18.97 |
| West Coast Paper | 588.35 | 3886.08 | 3.87 | 1138.62 | 34.65 | 278.35 | -1.15 | 1.74 |
| T N Newsprint | 256 | 1771.8 | 3.88 | 1262.65 | 24.87 | 128.66 | -1.2 | 5.82 |
| Andhra Paper | 448.6 | 1784.08 | 3.18 | 477.59 | 32.42 | 118.55 | -3.7 | -0.43 |
| Satia Industries | 138.95 | 1389.5 | 5.62 | 481.17 | 31.03 | 84.15 | 17.1 | 14.78 |
| Seshasayee Paper | 291.85 | 1840.67 | 4.51 | 426.57 | 22.29 | 71.75 | 2.33 | 10.3 |
| Kuantum Papers | 205.2 | 1790.61 | 7.46 | 312.81 | 34.99 | 65.13 | 18.03 | 140.65 |
| Orient Paper | 47 | 997.3 | 7.67 | 243.27 | 22.36 | 32.18 | 0.57 | 53.37 |
| Emami Paper | 131.75 | 797.1 | 48.3 | 518.59 | 6.46 | 1.33 | 2.88 | -24.91 |
JK Paper holds the top position in terms of both market capitalization and net profit reported by the company. However, it hasn’t performed well in the past year. Despite that, it has delivered an impressive return of 285%.
When assessing the best-performing stocks based on returns generated over the past year, Kuantum Papers emerges as the winner, achieving an impressive 140% growth during this period. The stock is currently trading at a Price-to-Earnings multiple of 7.5 times in the market.
From a technical perspective, West Coast Paper appears attractive on the charts. Additionally, other paper stocks are trying to gain momentum from their recent lows.
Paper stocks are currently displaying momentum. Investors should consider keeping an eye on paper stocks.
