Best Indian Paper Stocks for Investment in 2026

The Indian paper industry was always a bright spot of the nation’s manufacturing landscape, but faced some headwinds in recent years amid a surge in cheaper imports, volatile raw material (RM-wood, pulp, energy) costs and margin pressure. But despite these cyclical headwinds, the sector is poised for a robust recovery as we head into 2026.

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The Indian paper industry is projected to see steady demand growth led by various tailwinds, such as structural shifts towards sustainable green (EV savvy) packaging, vibrant e-commerce ecosystem and educational reforms (writing papers), despite the digital/AI boom.

Also, there are signs of moderation in cheaper imports. In 2026, the Indian paper industry is now getting a much-awaited relief from a significant policy shift in favour of higher tariffs & Minimum Import Price (MIP) on Virgin Monolayer Packaging Board (VMPB). This is effective at least until Q1CY26 and expected to extend beyond FY26.

This, along with ADD (anti-dumping duties) and other NTB/ regulatory tariff protection (10% BCD), may provide domestic producers with a protection shield from cheaper imports led by China and other ASEAN countries.

But there are some headwinds that still exist-like anomalies after the late 2024 GST reform; exempting certain uncoated papers (like educational notebooks) from GST (0%), effectively reducing IGST on imports to almost NIL in some cases.

Also, domestic producers are facing such anomalies as input GST on all papers is 15%, while output GST on such educational materials is 0%.

Anyway, overall stabilising domestic prices after the much-awaited GST & tariff restructuring are expected to improve operating margins by around 200 bps in FY27.

Recent government policy interventions, such as MIP on certain paper boards, have provided relief, sparking rallies in many paper stocks.

The sector is expected to grow at a 6-7% CAGR in FY27 to 30 MT- offering compelling opportunities for long-term investors who have patience and believe in India’s growth story.

Outlook of India’s paper industry

Indian average paper consumption is much lower at around 16 kg per capita, against the global average of over 50 kg.

Thus, there is an immense opportunity for growth, in line with India’s aspirations for becoming a developed and 3rd third-largest economy by 2047.

The packaging paper segment, accounting for almost 55% of operating revenue, is a major beneficiary of India’s regulatory ban on single-use plastics and the boom in the organised retail/FMCG (both online & offline)-now using such paper bags instead of plastics earlier.

Also, the printing and writing paper category is getting benefits from the government’s National Education Policy (NEP) 2020 and increased spending on literacy programmes.

The Indian Federal government is also expected to correct all GST & Tariff anomalies, including inverted structure, in its forthcoming budget for FY27 (to be presented early February’26).

1) JK Paper Ltd

• The undisputed market leader in both office & copier papers and also packaging boards.
• Integrated operations across Gujrat, Odisha and Telangana-ensuring cost advantages through in-house pulp productions.
• Announced $100 million CAPEX for FY27 for sustainable expansion and enhancement of energy efficiency.
• Has undertaken both organic & inorganic expansions & diversifications route for high-growth/margin segment.
• Various corporate restructuring and subsidiary mergers.
• Despite a muted FY25, the company is poised for recovery amid diversification of portfolio and expansions of exports to over 60 countries.
• Poised to grow around 15-25% CAGR over the next five years (FY: 26-30), supported by higher revenue and improved margins.

2) West Coast Paper Mills Ltd

• Another key player, focusing on premium printing, packaging and writing paper.
• Ensures high operational efficiencies with eco-friendly & sustainable operations.
• Optical brightener-free products align with global standards.
• Maintained consistent financial performances irrespective of underlying economic cycles, as it ensures backward integration.
• Looking ahead, the company is expected to deliver an improved report card due to improved market share, realisations and operating margins in FY27.

3) Seshasayee Paper & Boards Ltd (SESHA Paper)

• An established player, known for its 60 years of experience and high-quality integrated production.
• Undergoing, both organic & inorganic expansion, ensuring sustainability.
• Recently, secured EV clearance for a 20% expansion in capacity in its Erode factory.
• Also acquired assets of Servalakshmi Papers for a further increase in capacity.
• Its Esvin Group operations cater to diverse grades, including high speciality papers.
• Although impacted by export declines in H1FY26 due to Trump tariffs and growing geopolitical trade fragmentations, its strong focus on the domestic market and cost controls ensures resilience.
• Expected for a margin recovery in FY26-27 amid an easing of pressure from cheaper ASEAN imports and potential robust demand from the educational sector.

4) Andhra Paper Ltd

• Specialising in pulp, paper, and boards under established brands.
• Robust scale & well diversified products in writing/printing segments ensure steady cash flows.
• The government’s protectionist policy actions against cheaper imports benefited the bottom line.
• It may be a value for money in 2026 amid higher volume from packaging and operational efficiencies.

5) Tamil Nadu Newsprint & Papers Ltd (TNPL)

• A PSU undertaking with eco-friendly bagasse-based production.
• Uniquely diversifies into cement from RM waste, adding revenue streams.
• Aims for 1 MT/A capacity by 2030 through organic expansions.
• The focus on multilayer packaging boards aligns with e-commerce trends, offering defensive qualities amid cyclical challenges.
• Planning to enter the tissue manufacturing segment

Investment Considerations and Risks

While most of the stocks present attractive opportunities in 2026 due to low base effect amid subdued earnings growth in 2025 and subsequent decline in stock prices, the paper sector remains cyclical.

• Raw material price volatility and supply chain disruptions & geopolitical trade fragmentations
• Intensifying competition from imports, despite the recent imposition of tariffs and non-tariff barriers.
• Digitalisation is impacting printing paper demand for the long term (structural issues).

Conclusion: A Sector Ripe for Revival

India, a nation of 1.5 billion people, thrives on education & academic innovation. As India marches towards 2026 with an aim for a developed economy and the world’s 3rd largest by 2047, the paper industry is poised to play a pivotal role.

Higher revenue along with margin expansion, in 2026, India’s paper sector is poised to outperform the benchmark index in 2026 after years of underperformance, providing some valuation comfort.