Paper stocks in demand; Emami Paper, West Coast Paper zoom up to 20%

Shares of paper manufacturers were in demand for the second straight session on Tuesday and rallied up to 20 per cent on the BSE in intra-day trade following the government’s draft regulation under which there can be a ban on single-use plastic for candy and ice cream sticks, film wraps around sweet boxes and cigarette packets, etc.

Emami Paper was locked in the upper circuit of 20 per cent at Rs 116.55 on the BSE. A combined 475,000 equity shares had changing hands on the counter so far and there were pending buy orders for 49,000 equity shares on the NSE and BSE.

Astron Paper & Board Mill surged 15 per cent to Rs 49.50 followed by Mills (up 14 per cent to Rs 269). Tamil Nadu Newsprint (Rs 155), Malu Paper Mills (Rs 30.70), Star Paper Mills (Rs 138.50) and Orient Paper & Industries (Rs 31.20) gained 8 per cent each while Seshasayee Paper & Boards added 7 per cent to Rs 169 on the BSE. In comparison, the S&P BSE Sensex was up 0.48 per cent at 50,638 points at 12:25 pm.

According to a Financial Express report, the Centre has proposed that single-use plastics such as plastic sticks in earbuds and balloons, plastic flags, candy- and ice-cream-sticks, and polystyrene for decoration be banned from January 1, 2022, while disposable plates, cups, glasses, cutlery, straw, trays, plastic wrapping around sweet-boxes, invitation cards, cigarette packets, etc, and plastic/PVC banners less than 100 microns thick be banned from July 1, 2022.

Covid-19 has severally disrupted the demand for paper and paper board across all segments since Q4 of 2019-20. Demand for tissue paper is expected to register improvement in the wake of increased hygiene concerns. Demand for newsprint is expected to decline due to lower circulation owing to the increased habit of digital newspaper reading, lower advertisement spending etc.

However, post Covid-19 pandemic, there will be growth opportunities for the Indian Print and Packaging Industry, disposable cups, bowls and cartons, overwrap, bags, corrugated boxes and branded packaging for online delivery and sealable paper products as a substitute for single-use plastics, Mills said in the financial year 2019-20 (FY20) annual report.

The present situation is expected to usher in higher packaging board’s usage by the pharma industry. Added to this, the ban on one-time-use plastic bags and increase in home delivery of various products could lead to higher demand of packaging grades of boards through the e-commerce segment, TN Newsprint said in its FY20 annual report.

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