Schools, colleges, offices and courts have opened in the past month, leading to paper shortages. Analysts said paper companies should see strong profit growth in the coming quarters on the back of recovering demand and better prices. JK Paper, West Coast Paper and Andhra Paper are among analysts’ top picks.
“Paper stocks had a good build up this week as almost everyone raised prices, and traditionally the fourth quarter is always the best quarter, even more so this time around given the rise of the theme. opening,” said S Ranganathan, Head of Research, LKP Securities.
Shares of JK Paper, West Coast Paper Mills, Seshasayee Paper, Andhra Paper and Kuantum Papers have risen 20% to 25% over the past five trading sessions. TN Newsprint and Orient Paper gained more than 15% during this period.
“JK Paper recently launched its panel plant and the outlook is bright for the future. Despite the lack of panels, West Coast Paper has great capabilities and is a great player with positive prospects for the future,” Ranganathan said. Wastepaper prices have skyrocketed in recent months as many offices and schools remained closed for nearly two years due to the pandemic, resulting in lower collections.