Paper stocks on a roll, Here is why the sector is buzzing today?

New Delhi: Shares of Paper and Paper product companies have been on a roll on Wednesday, hitting upper circuit, with many of them scaling to new 52-week highs.

Companies like and soared 20 per cent each, their daily circuit limit to Rs 46.50 and Rs 189.50, respectively. Malu Paper Mills also gained 19 per cent to Rs 38.90.

Companies like , , and Shree Rama Newsprints surged between 11 and 19 per cent. Big Players like Andhra Paper and gained up to 7 per cent.

According to experts, demand is expected to pick up and grow by 11-15 per cent year on year in fiscal 2022 with schools, colleges and office spaces likely to open and drive the demand.

Also, the lumber prices in China have shot up rapidly in the last few weeks. This is likely to act as a tailwind for the domestic companies, which are expected to rise prices by 10-15 per cent in the short term.

Prior to this, the paper and paper products industry is one of the worst-affected industries due to the outbreak of Covid-19 pandemic.

Analysts said that the sector is among the underperformers, but quality stocks might outperform in the coming days. The growth in print media in the last few months and traction might continue in coming months.

"This industry was one of the worst affected due to COVID-19 restrictions which include educational institutes along with the printing industry which is expected to recover in next two quarters," said Likhita Chepa of CapitalVia Global Research.

The sector might again show decent CAGR growth of more than 8 per cent, she added. "JK Papers, Orient paper and Seshasahi papers are among favorites picks which might outperform the markets."