The Hindu Business Line : Paper stocks move up on price rise expectation

THE paper stocks moved up on Friday on the expectation of an imminent price rise in writing and printing paper. JK Paper stock gained most in terms of price (up 10.67 per cent), while BILT stock attracted very heavy trading volume at 45.40 lakh shares on the NSE. It finished at Rs 100.15 with a gain of 7.11 per cent. Rama Newsprint had a traded quantity of 82 lakh shares and moved up by 4.15 per cent.

According to dealers, apart from hopes of price increase, market is also expecting some tax relief from the Budget announcement for the paper industry.

Mr Rajesh Agarwal of CD Equisearch, the demand and supply mismatch for paper is likely to continue in the domestic market even though many of the mills have chalked up expansion plans. This, according to him, makes the paper market ready for absorbing price increases.

According to reports, the mills may go in for price hike of Rs 1,000 a tonne from March 1.

If carried out, this would be the first such hike this calendar year as the last one was in October 2004.

According to Mr Devarsh Vakil of Anagram Stockbroking, sales of domestic paper units are expected to grow at about 6-8 per cent per annum because of increasing demand for writing and printing paper and marginally higher consumption of packaging paper.

JK Paper, country's largest copier paper maker with a market share of 45 per cent, has indicated to raise its product price by Rs 1,000 per tonne from March.

According to Mr Agarwal, the proposed price rise to not only offset rise in input costs but also inflate margins.

The mills in the southern region particularly have been feeling the pinch because of shortage of bagasse.

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