Paper stocks in focus on strong Q2 results; Seshasayee Paper surges 18%

Ballarpur Industries, JK Paper, West Coast Paper, Star Paper Mills and International Paper APPM were up in the range of 5% to 7%.

Shares of paper companies have rallied by up to 18% on the BSE in intra-day trade after Seshasayee Paper & Boards and International Paper APPM posted a strong set of numbers for the quarter ended September 2018 (Q2FY19).

Seshasayee Paper & Boards, Ballarpur Industries, JK Paper, West Coast Paper, Star Paper Mills and International Paper APPM were up in the range of 5% to 15%, as compared to 0.77% rise in the S&P BSE Sensex at 11:58 PM.

Among the individual stocks, Seshasayee Paper & Boards has surged 18% to Rs 1,220 in intra-day trade on the back of heavy volumes after the company’s Q2FY19 net profit jumped 92% at Rs 504 million over the previous year quarter, on back of strong revenue growth. Operation revenue during the quarter rose 46% at Rs 3,312 million over Q2FY18.

International Paper APPM was up 6% to Rs 477 after the company posted a six-fold jump in net profit at Rs 374 million in Q2FY19. It had a profit of Rs 58 million in Q2FY18. Revenue from operations grew 18% at Rs 3,359 million against Rs 2,850 million in the corresponding quarter of the previous year.

ITC’s paperboards, paper & packaging segment profit up 13.4% driven by product mix enrichment, higher realisation, strategic investments in imported pulp substitution, process innovation leading to improved pulp yield and benefits of cost-competitive fibre chain. The segment revenue growth of 8.8% was driven by strong demand and capacity augmentation in value-added paperboard and decor segments.

Analysts at Prabhudas Lilladher said ITC’s paperboard margins are expected to improve given benign input costs and revamp of the 1.5 lakh TPA value added paperboard machine. ITC was trading 1% higher at Rs 282 on the BSE.