CRISIL SME Tracker: Hour of reckoning for small paper packaging units

CRISIL's analysis shows that the price of kraft paper, which accounts for about 60 per cent of input cost, has surged 12 per cent this fiscal on supply constraints

Revenue growth at CRISIL-rated medium, small and micro enterprises (MSMEs) in the paper and paperboard packaging sector is expected to decline 300-500 basis points (bps) to 10-12 per cent on sluggish demand following the implementation of the goods and services tax and weak pricing power. The sector, which is highly fragmented with over 5,000 units dotting the country, had clocked 15-18 per cent growth in fiscal years 2015 and 2016.
 

The price of kraft paper, which accounts for about 60 per cent of input cost, has surged 12 per cent this fiscal on supply constraints. Consequently, CRISIL