Shares of paper manufacturers rose sharply in the morning trade on August 1, expecting the sector to report strong earnings for the quarter ended June following blockbuster performance of one of the segment leaders JK Paper.
JK Paper reported a more than 100 percent increase in consolidated revenues to Rs 1,508.1 crore for the reported quarter aided by strong demand and pricing environment for paper makers.
The company’s consolidated operating profit jumped 104 percent on a year-on-year basis, while its net profit nearly tripled to Rs 264 crore in the June quarter.
JK Paper’s earnings performance has led investors to believe that other companies in the sector will also report similarly strong numbers for the June quarter.
Further, optimism was also fuelled by reports of a possible 6-7 percent hike in prices undertaken by companies from August.
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Globally, the supply of paper is being constrained due to the closure of several plants in Europe because of the ongoing energy crisis.
Analysts have also pointed to the ban on single-use plastic kicking in July, which is also expected to fuel domestic demand in the coming quarters.
“Demand for paper and boards remains strong,” said Harsh Pati Singhania, vice chairman and managing director at JK Paper.
At 10.45 am, shares of JK Paper, West Coast Paper, Tamil Nadu Newsprint and Andhra Paper were up 7-17 percent on the National Stock Exchange.
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