Paper stocks rally up to 115% in FY24, SWOT analysis supports bullish sentiment

In yesterday's trading session (on September 06), paper and paper products stocks experienced a significant surge. Most of these stocks witnessed a double-digit increase in their intraday high prices. Interestingly, if you analyze the trend, you'll notice that the prices of these stocks had already started rising some time ago. In fact, the majority of stocks in this sector have shown a substantial rally in the current fiscal year (FY24) when compared to their previous year's performance.

ETMarkets has identified 5 stocks that have surged by over 50% in just a little over 5 months into FY24. To be considered, these stocks must have a market capitalization exceeding Rs 100 crore, and their sales in the June quarter must have surpassed Rs 100 crore. Notably, all of these stocks are currently trading at levels very close to their highest prices over the past year. It's important to mention that the price performance of industry leaders JK Paper and West Coast Paper Mills in FY24 has been positive, albeit a decrease compared to the preceding fiscal year. (Data Source: ACE Equity).

According to a Nuvama report, there is a growing demand for innovative packaging solutions in sectors such as FMCG and retail, as they aim to reduce their dependence on plastics. Furthermore, paper stocks can benefit from the increasing popularity of e-commerce shopping and the consumption of ready-to-eat and packaged foods. All 5 stocks have exhibited considerable strength in their SWOT analysis, as indicated by Trendlyne data.

Previous Close: Rs 206 | 52-week high: Rs 215-Company with high TTM EPS Growth-Good quarterly growth in the recent results-RoCE improving in last 2 years-Growth in net profit with increasing profit margin (QoQ)-Growth in quarterly net profit with increasing profit margin (YoY)

Previous Close: Rs 21 | 52-week high: Rs 22-MACD crossover above signal line-Company with decreasing promoter pledge-Near 52-week high-The stock gained more than 20% in one month

Previous Close: Rs 232 | 52-week high: Rs 236-Company with no debt-Increasing revenue, profit every quarter for the past 2 quarters-Annual net profits improving for last 2 years-Book Value per share improving for last 2 years-FII/FPI or Institutions increasing their shareholding

Previous Close: Rs 59 | 52-week high: Rs 59-ROE improving since last 2 years-ROA improving since last 2 years-Growth in quarterly net profit with increasing profit margin (YoY)-Company with low debt-Annual net profits improving for last 2 years-Company with zero promoter pledge

Previous Close: Rs 366 | 52-week high: Rs 369-Company with no debt-Improving cash flow from operation for last 2 years-Annual net profits improving for last 2 years-Book Value per share Improving for last 2 years-Company with zero promoter pledge-FII/FPI or Institutions increasing their shareholding