E-commerce props up paper-packaging fortunes

A revival in demand, led by increased offtake from e-commerce channels, will support a rebound for paper-packaging entities this fiscal, offsetting the impact of pandemic-induced disruptions in the first quarter, Crisil said on Tuesday.

According to the rating agency, despite a 200 basis points (ps) blow to operating margin, credit profiles will be stable on the back of strong capital structure.

A study of 50 CRISIL-rated companies, which account for 37 per cent of the industry’s revenue, indicates as much.Sales volume had wilted after the lockdown as demand from key end-user industries such as ready-made garments, industrial components, consumer durables and exports weakened.