Stocks like Pudumjee Paper, Orient Paper, Emami Paper and JK Paper have registered sizable gain in the intraday trade
Stock market today: On account of central government's notification to ban single use plastic from 1st July 2022, paper stocks are skyrocketing today. According to the stock market experts, paper stocks are riding high on the hope that single-use plastic ban will benefit paper industry. They said that in the wake of plastic ban, people will move to paper usage leading to rise in demand and footfall for paper manufacturing companies. Stocks like Pudumjee Paper, Orient Paper and Emami Paper have registered sizable gain in the intraday trade and experts said that the rise can be attributed to this central government decision that is working as positive short-term sentiment for these paper stocks.
Speaking on the reason for rise in paper stocks today; Avinash Gorakshkar, Head of Research at Profitmart Securities said, "This rise in paper stocks is mainly due to the central government's yesterday's notification banning single-use of plastic from 1st July 2022. In fact, this is expected to further fuel paper stock as the decision is going to become effective from 1st July 2022."
Standing in sync with Avinash Gorakshkar's views; Santosh Meena, Head of Research at Swastika Investmart Ltd said, "All commodity stocks are in Bull Run where paper stocks are also part of this rally where they are gaining momentum today on news that single use of plastic will be banned from July 1, 2022," adding, "We have seen a decent rally in some of the paper stocks in the last few months because of reopening and surge in lumber prices globally whereas most of the companies posted a good set of results where JK paper did exceptionally well. The outlook for paper stocks is still bullish but investors should be cautious while choosing companies in this bulls run."
Asked about the paper stocks that one can buy Santosh Meena recommended JK Paper and Pudumji Paper stocks to buy today. He advised investors to buy JK Paper shares at CMP for the target of ₹320 to ₹370 for immediate to medium-term time horizon maintaining stop loss at ₹238. He said that Pudumji Paper is also looking strong where 47.5 is an immediate hurdle; above this, we can expect a rally towards 60 levels while 39 should be a stop loss for the traders.
Sharing his paper stock pick Rahul Sharma, Co- Founder at Equity99 said, "Orient Papers is largest producer of tissue paper in India. Company is debt free and has Investment of ₹470 crore in Shares of Century Textiles, Ultra Tech Cement and HIL Ltd against Market Cap of ₹637 crore. We expect company to reach target price of ₹37 with stop loss of ₹27."
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