Backed by Paper

Index : 2,099 | 1Yr : +16.72% | 1Mo : -2%

Category : Sectoral Trackers

Min Investment : 2,826

Sharpe Volatility Trend

The age old paper industry has been growing steadily over the years in spite of the widescale digitization and save trees campaigns across the world. India is yet the fastest growing market for paper globally. The sub-segments of paper like copier, coated paper and packaging board has grown steadily. The growth in e-commerce space has benefited the the packaging segment significantly. In spite of having over 16 percent of the world's population, India produces only 3 percent and on a per capita consumption basis, it is one fifth of the world average.

The industry is largely affected by the price of wood imports (< 20 percent wood deficit), chinese paper imports, and currency depreciation since India is mostly a domestic market due to the demand scenario. Unlike industries with higher margins that can produce goods just to cover overhead costs, paper manufacturing is a high volume & low margin industry so when prices drop too low, manufacturing not feasible.

Upgradation of machinery will play a pivotal role in the future growth as the total capacity utilization is already around 90 percent at this stage. Invest in well managed companies that are mostl likely to capture the future growth potential of the paper manufacturing industry in India.

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