Margin pressure may hit paper cos in near-term despite price hike: Analysts

Investor interest in paper stocks seems to be far from over despite the near-term headwinds. Though the robust demand supports expectations of strong earnings going forward, analysts caution that the rise in input cost for paper manufacturers is likely to squeeze margins.

The rally in paper stocks began early September when states eased Covid-19 related restrictions and announced re-opening of schools and offices. It, however, picked up pace recently amid reports of likely imposition of anti-dumping duty on decor paper imports from China, and expectations of further price hikes due to increase in cost of raw material.

“After the re-opening