Paper stocks surge on strong Q1 earnings by Seshasayee Paper

Seshasayee Paper, Shreyans Ind, West Coast Paper and Emami Paper were up more than 10% each on the BSE.

Shares of paper and paper product companies were trading higher by up to 20% on the Bombay Stock Exchange (BSE) after Seshasayee Paper and Boards reported robust earnings for the quarter ended June 30, 2016 (Q1FY17).

Seshasayee Paper and Boards, Shreyans Industries, West Coast Paper and Emami Paper were trading higher by more than 10% each on the BSE. Ballarpur Industries, International Paper APPM, Tamil Nadu Newsprint, Kuantum Papers, JK Paper and Star Paper Mills were up between 5%-10%. At 11:25 AM, the S&P BSE Sensex was up 0.43% or 119 points at 27,922.

Seshasayee Paper and Boards is locked in upper circuit of 20% at Rs 381, also its record high on the BSE, after the company posted an over four-fold jump in net profit at Rs 24.12 crore in Q1FY17, on back of strong operational performance. The company had profit of Rs 5.39 crore in the same quarter last fiscal.

Income from operations of the company however grew single digit by 4.6% at Rs 249 crore during the quarter under review against Rs 238 crore in the corresponding quarter of previous year.

Earnings before interest, taxes, depreciation and amortization (ebitda) margins nearly doubled to 17.59% in Q1FY17 from 9.9% in Q1FY16.

The company said, during the quarter under review a long term wage settlement was reached with staff association with regard to payment of salary, bonus, production incentive and other benefits. The settlement is for the period of five years from 2014-15 to 2018-19.