The Centre's decision to ban the use of plastic sachets for storing and selling gutkha, pan, pan masala and the ban on using recycled plastic for packing food stuff saw packaging stocks hammered between 2.71 and 10.04 per cent.

The stocks most hit were Cosmo Films (down 9.63 per cent to close at Rs 99), Uflex (down 9.59 per cent to close at Rs 142.85), Garware Polyester (down 5.73 per cent to close at Rs.151.25), Polyplex Corporation (lost 10.04 per cent to close at Rs.235.6) and Jindal Poly Films (down 2.71 per cent to close at Rs.447.5).

Micron regulator

Known as the Plastic Waste (Management and Handling) Rules 2011, the norms prohibit the use of carry bags that are less than less than 40 microns thick.

Municipalities have been given the responsibility to engage agencies that are into waste management, including rag-pickers.

Municipalities have been entrusted with the task of setting up, operationalising and coordinating the waste management system. They have to ensure safe collection, storage, segregation, transportation, processing and disposal of plastic waste without damaging the environment during this process

Municipalities have been asked to ensure setting up of waste collection centres, channelise this waste to recyclers and create awareness about stakeholders' responsibility and make certain that plastic waste is not burnt in the open.

Market experts believe that it was waiting to happen.

“Many stocks have been hammered on concerns related to environment issues,” said Dr Nirakar Pradhan, CIO- Future Generali Life Insurance.

“It is a question of which sector is being hammered down and those that haven't been sold earlier are now being sold.”

Other factors

Experts said that other factors such as high crude oil prices and margin squeeze have played spoilsport.

“This business has been hit on both the cost and the revenue side,” said the Head of Research of an Indian brokerage specialising in mid-cap and small-cap ideas.

“Rising crude oil and a 10-15 per cent drop in prices of finished products has hit margins hard.”

Experts said that this industry has seen capacity additions in the last 12- 18 months and there has been little incremental demand to justify and utilise this capital expenditure.

Finally, the street was also wary of concerns regarding the top management of Uflex whose promoter was arrested by the CBI in a land related case.

“They went down the same way, they had gone up as the markets got a pretext to pull these scrips down,” summed up Mr Rajesh Agarwal, Head- Research Eastern Financiers, a Kolkata-based broker.

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