JK Paper, TN Newsprint, West Coast Paper rally up to 17% on heavy volumes

Paper stocks in demand amid hopes of some relief for the industry from the extensive plantation initiatives undertaken, which are expected to improve raw material availability and its cost.

Paper stocks rally on Monday

  Shares of paper companies were in focus and rallied up to 17 per cent on the BSE in Monday’s intra-day trade amid heavy volumes on expectations of an improvement in operational performance.

 

Tamil Nadu Newsprint & Paper (up 17 per cent at ₹179.15), JK Paper (up 15 per cent at ₹401), Emami Paper Mills (up 15 per cent at ₹111.27), West Coast Paper (up 14 per cent at ₹553.45) and Malu Paper Mills (up 13 per cent at ₹42.40) surged more than 10 per cent each. In comparison, the BSE Sensex was up 0.24 per cent at 81,527.30 at 10:45 AM.

 

The average trading volumes at the TN Newsprint and JK Paper counters surged multiple-fold with a combined 10 million equity shares changing hands at each of these counters on the NSE and BSE.

 

West Coast Paper Mills on August 11, 2025 said that the domestic paper industry continues to face intense price pressure from rising imports and elevated input costs. Imports of paper and paperboard have jumped sharply hitting record levels resulting in lower volume and impact on sales realization. At the same time, high wood costs continued to impact performance. The management said the company remains focused on operational efficiencies and product-mix improvements to protect profitability. 

 

High raw material (wood costs), coupled with lower sales price realisations on account of increase in imports, are expected to moderate profitability. However, some relief may emerge from the extensive plantation initiatives undertaken, which are expected to improve raw material availability and its cost, JK Paper said in its FY25 annual report.

 

The economic environment in 2025–26 is likely to remain volatile, particularly in the wake of the US tariff war that began in April 2025. The ongoing US-China trade conflict may hamper global economic growth, with potential downstream effects on India’s economy and the domestic demand for paper and packaging products.

 

The company will endeavor to perform better than the broad sector during the current financial year, protecting its credit rating. The company will focus on value-addition (superior paperboard and copier varieties), invest in business strengthening initiatives and remain prepared to broad-based its portfolio and enter the next orbit, JK Paper said.

 

Meanwhile, operating efficiency is expected to improve from fiscal 2026 aided by moderation in raw material prices especially of hardwood. Due to lower plantation during the pandemic and higher competition from other wood-based industries, such as plywood, there have been increased demand for hardwood leading to unexpected increase in prices. Hardwood is the major raw material for manufacturing virgin paper. 

 

However, since then, all the players increased their plantation efforts since fiscal 2022 and hardwood availability has started improving from the fourth quarter of fiscal 2025. This is expected to continue throughout fiscal 2026, CRISIL Ratings said in JK Paper’s rating rationale on August 7, 2025.

 

Also, JK Paper is investing in Bleached Chemi-Thermo Mechanical Pulp (BCTMP) pulp mill, a backward integration project, which is expected to be completed in fiscal 2026. This will further help the company improve its operating efficiency. Thus, JK Paper’s operating margin is expected to improve 250-300 bps in the near term and another 200-300 bps over the medium term because of declining raw material cost, stable realisation and improving operating leverage, the rating agency said.