The Indian paper industry is one of the emerging sectors in the Indian Financial market. It is growing steadily by maintaining its growth rate of about 7-8% Y-O-Y basis from the past 5-6 decades. When we talk about paper it’s more than the piece of paper we write on.
It consists of the manufacture of various types of paper such as newsprint paper, office paper, filter paper and parchment papers and paperboards and tissue papers etc.
The Indian paper industry is alone responsible for 3.7% of the global paper production.
Let us now look at the 10 best paper stocks trading in the Indian stock exchange.
1. J.K. PAPER
J.K. paper is part of the bigger J.K.enterprises which has its presence across the sectors. It has 2 large-scale paper mills. The total production capacity is 4.55 lac tonnes. It offers high EPS growth of 8.30% which indicates sustainable growth. Its net profit margins are also more than 20% and rising.
| Market Cap (cr) | 6762.54 |
| Debt to Equity | 1.03 |
| 1 year return (%) | 78.69 |
| ROE (%) | 18.29 |
2. West Coast Paper Mills Ltd.
West coast paper is one of the oldest paper mills that exist today. It generates annual revenue of nearly 1400 crores through the sale of its papers and paper products. Its product portfolio includes printing paper of 52 to 140 GSM, Machine glazed paper and boards of 80 to 300 GSM, premium printing papers, security featured papers and paper boards etc.
| Market Cap (cr) | 3463.27 |
| Debt to Equity | 0.26 |
| 1 year return (%) | 100.21 |
| ROE (%) | 18.20 |
3. Emami Paper Mills Ltd.
Established in the year 1981 Emami paper mills is a specialised paper company, whose expertise lies in 3 specific paper segments. This includes manufacturing of newsprint paper, writing and printing paper, multilayer-coated board. Its annual turnover exceeds 1200 crores. It has obtained 67% growth in its paper product share price last year.
| Market Cap (cr) | 862.41 |
| Debt to Equity | 1.92 |
| 1 year return (%) | -13.66 |
| ROE (%) | 28.03 |
4. Seshasayee Paper and Boards Ltd.
Seshasayee paper is one of the oldest companies in the race and holds an experience of about 60 years. Its city of incorporation is Chennai in Tamil Nadu.The product portfolio of the company predominantly comprises various types of paper such as copier paper, office papers, etc of various GSMs. The 315 crores worth expansion project is underway which would eventually increase the production capacity considerably.
| Market Cap (cr) | 1742.57 |
| Debt to Equity | 0.00 |
| 1 year return (%) | 83.95 |
| ROE (%) | 8.36 |
5. Satia Industries
Satia Industries is considered as the largest company which are wood and agro based. It uses wood chips, veneer waste, and wheat straws to manufacture its products. It consists of three paper mills which are responsible for producing various products listed in the product portfolio of the company. Which includes paper GSMs ranging from 42 to 200 GSM. It also manufactures virgin-based fibre paper cups.
| Market Cap (cr) | 1,198.50 |
| Debt to Equity | 0.57 |
| 1 year return (%) | – |
| ROE (%) | 18.47 |
6. Andhra Paper
It is a subsidiary of West Coast Paper Mills consisting of two production facilities in Andhra Pradesh. Its products include writing and printing paper, specialty papers, and copier paper. Its writing papers are used to make notebooks, calendars, diaries, etc. It supplies its products both in domestic and foreign markets. It has annual revenue of nearly 1000 crores. Investors should consider adding the stock of Andhra Paper to their portfolio.
| Market Cap (cr) | 1,780.70 |
| Debt to Equity | 0.05 |
| 1 year return (%) | 93.50 |
| ROE (%) | 12.77 |
7. Kuantum Papers Ltd.
Established in the 1980s in the backward areas of Punjab, they come with their unique feature of wood-free paper production which makes them first eco- friendly paper products producer in our list.The raw materials it uses are agricultural residue, straws, bagasse, and wood. Its paper products include cream wove paper, map litho paper, copier paper, cartridge paper, parchment paper, stiffener paper, and ledger paper.
| Market Cap (cr) | 1,093.85 |
| Debt to Equity | 0.92 |
| 1 year return (%) | – |
| ROE (%) | 1.61 |
8. Orient Paper and Industries
Established in 1936 with a single paper machine to become a larger conglomerate in the CK Birla group of companies. Its plants are fully integrated and independent right from the raw material to the finished product and by-product stage. It has its power generation plant, pulping plant as well as paper machines. Its products include writing and printing papers and industrial and specialty papers.Its annual turnover exceeds Rs. 450 crores.
| Market Cap (cr) | 958.02 |
| Debt to Equity | 0.13 |
| 1 year return (%) | 35.79 |
| ROE (%) | -1.85 |
9. Tamil Nadu Newsprint & Paper Ltd.
Tamil Nadu Newsprint & Paper ltd is the only paper company in India that uses the waste generated from paper mills into a high grade cement. As a result cement production contributes nearly 4% of company’s revenue The company is a leader in producing paper using bagasse.This paper stock manufactures paper, paperboard, cement and power generation. The company’s total manufacturing capacity is 13.58 TPA.
| Market Cap (cr) | 1600.50 |
| Debt to Equity | 1.40 |
| 1 year return (%) | 75.19 |
| ROE (%) | 0.90 |
10. Nr Agarwal Industries
Established in the year 1993 the company has its registered office in Mumbai. Its annual production capacity is 3,54,000 tonnes per annum. Its focus is on manufacturing paper and paper boards from 100% deinked wood-free recycled waste. It has sales both in the domestic and foreign market. Its waste management philosophy and its eco-friendly production process makes it a clean and green company.
| Market Cap (cr) | 436.28 |
| Debt to Equity | 0.27 |
| 1 year return (%) | -1.78 |
| ROE (%) | 11.38 |
Key Elements Which Drive the Indian Paper Industry
- India’s young Population : As India constitutes a vast number of young population, due to which each year a large number of young candidates sit in various exams to increase their employ-ability, due to which demand for various textbooks, question banks etc increases. Which ultimately raises the demand for paper.
- Alternate sources of packaging : As the government is discouraging the use of plastic in packaging. The demand for paper bags and other paper packaging alternatives is on rise.
- Low per capita consumption of paper : This is the biggest driver of the Indian paper industry. The average per capita consumption of paper in India is around 13 kgs. This is way below the global per capita consumption of 57 kgs. Now as the consumption of paper increases due to high literacy rate, the growth of the paper industry is more or less guaranteed.
- Utilising Paper Export Potential : Export of paper and paperboard from India to other countries have witnessed a robust growth of nearly 80% in FY22 and it is expected to grow further in the upcoming financial years.
Conclusion
As digitization in India is at its peak, many officials, companies etc instead of using papers are adopting various technologies to keep their records updated. These developments might have made a negative stance towards the Indian Paper Industry in the minds of the potential Investors. But the astonishing growth of the Indian Paper industry throughout the decades has denied these misconceptions.
Even though digitization prevails it is hard to replace paper from the packaging industry as the ban on plastics has created a potential opportunity in the packaging world which is being tapped by these paper industries.
