Moneycontrol PRO
Check Credit Score
Check Credit Score
HomeNewsBusinessMarkets

Paper stocks rally 2-10% amid buzz of single use plastic ban

In last 15 days to one month, several paper stocks have rallied 20-80 percent.

September 18, 2019 / 03:37 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Paper stocks have remained on buyers' radar after Prime Minister Narendra Modi, in his Independence speech, urged people and companies to junk single-use plastic beginning October 2, the birthday of Mahatma Gandhi.

Emami Paper, Genus Paper, JK Paper, Malu Paper, Orient Paper, Pudumjee Paper, Ruchira Papers, Seshasayee Paper, Shreyans Industries, Star Paper and West Coast Paper gained 2-10 percent on September 18. In last 15 days to one month, all these stocks have rallied 20-80 percent.

Modi has called for end single-use plastic use by Gandhi Jayanti in 2022. Plastic bags, cups, plates, small bottles, straws, and certain types of sachets are among the items the Prime Minister wants put out of use.

Image21892019

Analysts, however, are not taken by the rally in paper stocks. They say it could be short-lived, as paper is not the only alternative to plastic.

"This is news-based momentum rally as fundamentally, these are high- debt firms with major working capital and raw material issues," said Sameer Kalra, Founder of Target Investing.
Kalra said only those with captive raw material source would benefit in the medium to long term.

G Chokkalingam, Founder of Equinomics Research & Advisory, agreed with Kalra. "The rally in paper stocks may fizzle out soon. The ban on plastic will come into effect gradually and also there are other alternatives to plastic as well such as jute and cloth bags," he said.

Moneycontrol News
first published: Sep 18, 2019 03:37 pm

Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347