• Facebook
  • Twitter
  • Instagram
  • RSS
  • Telegram
  • Screener
  • Stock Compare
  • Superstar Portfolio
  • Stock Buckets
  • Corporate Actions
  • Nifty Heatmap
  • Portal
  • Youtube
  • *We’re Hiring!
0 Items
Trade Brains
  • Articles
  • News
  • Screener
  • IPO
  • Videos
  • Resources
    • IPO
    • Podcast
    • Quizzes
    • Intrinsic Value Calculators
    • SIP Calculator
    • Best Quotes
    • Books
      • Dividend Investing
      • Value Investing
      • Investing Mindset
      • Book Reviews
      • FREE Guide
Select Page

Fundamental Analysis Of TCPL Packaging – Products, Profitability & More

by Vikalp Mishra | Mar 13, 2023 | Case Study, Stocks | 1 comment

Fundamental Analysis of TCPL Packaging - Cover Image

Fundamental Analysis of TCPL Packaging: Indians are consuming more and more packaged products instead of losing ones. And that’s not it, they are buying a lot of well-packed goods as well. This has resulted in a boom for the packaging industry with firms reporting higher earnings and announcing expansion plans. Are there attractive investment opportunities in the sector?

telegram channel

In this article, we’ll try to know that by performing a fundamental analysis of TCPL Packaging, a small-cap stock in the packaging industry.

Table of Contents

  • Fundamental Analysis of TCPL Packaging
  • Company Overview
    • Products Of TCPL Packaging
  • Industry Overview
  • TCPL Packaging – Financials
    • Revenue & Net Profit Growth
    • Operating & Net Profit Margin
    • Return Ratios: RoCE & RoE
    • Debt / Equity & Interest Coverage
  • Future Plans of TCPL Packaging
  • TCPL Packaging – Key Metrics
  • In Conclusion

Fundamental Analysis of TCPL Packaging

We’ll start our analysis with a quick overview of the business of TCPL Packaging and the scope of its operations. Next, we shall acquaint ourselves with the packaging industry landscape. After that, a few sections are devoted to the financials of the stock. A highlight of the future plans and a summary conclude the article.

Company Overview

Incorporated in 1990, TCPL Packaging is a small-cap packaging company engaged in the manufacturing of folding cartons, specialty/gift packaging, and flexible packaging. It has headquarters in Mumbai with marketing offices in multiple metro cities in India.

Products Of TCPL Packaging

Source: TCPL Packaging Annual Report FY 2021-22

It owns 8 state-of-the-art production facilities across the nation. The company employs over 1,900 individuals and supplies its products to leading companies including HUL, Marico, ITC, Dabur, Parle, Nestle India, United Spirits, Abbott, and more.

The packaging company earned 76.49% of its FY22 revenues from sales within India. Exports accounted for 23.51% of the total income for the company. The table below shows the geographic operating segments of TCPL Packaging for the last two fiscals.

GeographyFY21FY22
Domestic sales77.5676.49
Exports22.4423.51
(figures in %)

We now understand what the company does. Let us move to learn about the industry in which it operates.

Industry Overview

Packaging is a large industry globally with multiple sub-segment such as glass, paper, carton/folding, PET bottles, and more. The worldwide packaging sector was valued at $ 1,002.48 billion in 2021. This provides space for a large number of small and big companies to operate in the sector.

India’s packaging industry is projected to grow fast at a CAGR of 26.7% during the 2022 to 2027 period. Increasing population, rising incomes, evolving lifestyles, and higher internet adoption are key identified factors that will lead the growth in the sector. 

All these factors are coming into play as the nation’s large middle-class population is spending more on organized retail and online purchases.

Let us now move forward to study the financials of the company as part of our fundamental analysis of TCPL Packaging.

TCPL Packaging – Financials

Revenue & Net Profit Growth

The revenues of TCPL Packaging have increased at a CAGR of 8.31% from Rs 672.35 crore in FY17 to Rs 1,085.74 crore in FY22. During the same period, the company’s profits inched up at an average of 6.31% every year.

The table below presents the operating revenues and net profits of TCPL Packaging for the last six financial years.

Fiscal YearOperating revenueNet profit
20221,085.7446.87
2021903.8233.47
2020889.7836.52
2019815.8128.95
2018713.7120.22
2017672.3532.47
6-yr CAGR8.31%6.31%
(figures in Rs Cr except for CAGR)

The cost of raw materials went up in 2018 bringing down the profitability of the company sharply. It is only in recent years that the margins of the company have stabilized again. We shall read more on this in the next section on margins: operating profit and net profit.

Operating & Net Profit Margin

The margins of the company have improved in recent years with the operating profit margin and net profit margin coming closer to FY2017 levels. A rise in demand and subsequently higher utilization levels shall further help in the margin expansion along with material cost decline in the future.

The table below shows the profit margins of TCPL Packaging for the last six fiscals.

Fiscal YearOPMNPM
2022144
2021154
2020144
2019134
2018123
2017165
(figures in %)

In the next section we’ll see how the earnings and margins have translated into the return ratios: return on capital employed (RoCE) and return on equity (RoE).

Return Ratios: RoCE & RoE

The RoCE and RoE of the packaging stock stood at 14.26% and 14.58% in FY22 respectively. Thus, we can conclude that TCPL Packaging is a low-margin, high-volume business with high turnover ratios. Thus, capacity utilization level shall always remain a key determinant of the performance of the company.

Overall the profitability of the company seems to have improved in the recent fiscal. The table below highlights the improvement in the return ratios of the company for the previous six financial years.

Fiscal YearRoCERoE
202214.2614.58
202113.2211.75
202013.3314.32
201913.2912.68
201810.8610.27
201716.3920.59
(figures in %)

Debt / Equity & Interest Coverage

Moving onto the leverage analysis of TCPL Packaging, we can see that it had a high debt-to-equity ratio of 1.32 with an interest coverage ratio of 4.62 in FY22. The debt is a primary part of the capital structure for the company.

The table below highlights the debt-to-equity ratio and interest coverage of the stock over the last six financial years.

Fiscal YearDebt / EquityInterest Coverage
20221.324.62
20210.933.66
20201.162.13
20191.132.47
20181.172.07

Future Plans of TCPL Packaging

So far we looked at previous years’ data for our fundamental analysis of TCPL Packaging. In this section, we’ll try to get a sense of what lies ahead for the company and its investors.

  1. Late in 2021, the company purchased a majority stake in Creative Offset Printers, a privately owned manufacturer in consumer electronics and premium rigid box packaging space. This shall benefit TCPL as India becomes 2nd largest mobile manufacturer.
  2. It has also ventured into the production and distribution of blown PE film and sustainable packaging films. Very few Indian players cater to this specialty fully recyclable PE film sub-segment as of now.
  3. In addition to this, TCPL entered the Middle East market recently by establishing a subsidiary in UAE and a marketing office in Dubai.

TCPL Packaging – Key Metrics

We are almost at the end of our fundamental analysis of TCPL Packaging. Let us take a quick look at the key metrics of the stock.

CMP₹1,300Market Cap (Cr.)₹1,200
EPS₹119Stock P/E12.4
RoCE14.26%RoE14.58%
Promoter Holding55.7%Book Value₹437
Debt to Equity1.32Price to Book Value2.97
Net Profit Margin4%Operating Profit Margin14%

In Conclusion

As we conclude our fundamental analysis of TCPL Packaging, we can say that the company is well-positioned in a rapidly growing market with its marquee clients. The present financial leverage and operating leverage may translate into higher earnings potential for the company. However, they also raise the inherent risk of sharper profit decline if sales fall.

Do you think that the company will be able to deliver good top-line and bottom-line growth in the coming quarters? How about you let us know your views in the comments below?

You can now get the latest updates in the stock market on Trade Brains News and you can also use our Trade Brains Stock Screener to find the best stocks.

Vikalp Mishra

Vikalp Mishra is a commerce graduate from the University of Delhi. He likes to write on finance, money and business. He is a voracious reader with a genuine interest in investing. Drop him a mail at vikalp.mishra@tradebrains.in.


Start Your Stock Market Journey Today!

Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!

  1. tarea อุบล
    tarea อุบล on March 23, 2023 at 9:21 am

    This is very good content. I have read and found it useful for me. I like to read this kind of blog.

    Reply

Submit a Comment Cancel reply

Your email address will not be published. Required fields are marked *

Search Topic or Keyword

Trending Articles

  • Flipkart Big Billion Days 2023 - Cover ImageUnlocking The Truth Behind Flipkart Big Billion Days Revenue
  • Top Stocks Held by Quant Small-Cap Fund - Cover ImageTop Stocks Held by Quant Small-Cap Fund – Portfolio Analysis
  • Tweezer Top and Tweezer Bottom Candlestick Patterns - Cover ImageTweezer Top and Tweezer Bottom Candlestick Patterns
  • World Cup ICC 2023 and Economy in India - Cover ImageHow Hosting the World Cup in India can Boost its Economy by $1.64 billion?
  • High Promoter Holding Stocks Under Rs 100 - Cover ImageHigh Promoter Holding Stocks Under Rs 100 To Add To Your Watchlist
  • Best Defence Stocks With High FII Holdings - Cover ImageBest Defence Stocks With High FII Holdings To Add To Your Watchlist
  • Most Traded Commodities in The World - Cover Image10 Most Traded Commodities in The World – Everyday Essentials
  • Fundamental Analysis of Exide Industries - Cover ImageFundamental Analysis of Exide Industries – Future Plans & More
  • Afghanistan’s currency become the world’s best - Cover ImageHow did Afghanistan’s Currency become the World’s Best Under Taliban Rule?
  • Karnika Industries IPO Review - Cover ImageKarnika Industries IPO Review – GMP, Price, Details & More

Recent IPO’s

  • Karnika Industries IPO Review – GMP, Price, Details & More
  • Vishnusurya Projects and Infra IPO Review – GMP, Details & More
  • Plaza Wires IPO Review – GMP, Price, Details & More
  • Valiant Laboratories IPO Review – GMP, Price, Details & More
  • JSW Infrastructure IPO Review – GMP, Price, Details & More

Easiest Stock Screener Tool!

Best stock discovery tool with +130 filters, built for fundamental analysis. Profitability, Growth, Valuation, Liquidity, and many more filters. Search Stocks Industry-wise, Export Data For Offline Analysis, Customizable Filters.

  • — Stock Screener
  • — Compare Stocks
  • — Stock Buckets
  • — Portfolio Backtesting

Start your stock analysis journey with Trade Brains Portal today. Launch here!

Keep the Learning On!

Subscribe to Youtube to watch our latest stock market videos. Subscribe here.

About Trade Brains

Trade Brains is a Stock market analytics, financial & business news service provider and education platform in India with a mission to simplify stock market investing and trading.

Recognized by:

startup india

Quick Links

  • Trade Brains Portal
  • Stock Screener
  • Compare Stocks
  • Trade Brains News
  • Fair Value Calculator
  • Fingrad Academy
  • Subscribe on Youtube

Contact and Partnership

Reach us out at

  • Phone: [+91] 8088491790
  • Email: info@tradebrains.in

For Advertisement, Press Releases, Partnerships or to get backlinks on this website, please e-mail us at advertise@tradebrains.in

Market

  • List of BSE200 Companies
  • List of NIFTY500 Companies
  • List of NIFTY NEXT 50 Companies
  • NIFTY Top gainers in 5 Days
  • NIFTY100 Most Active Stocks
  • NIFTY Top Gainers in 1 Month
  • About
  • Careers
  • Advertise & Backlinks
  • Terms and Conditions
  • Disclaimer & Privacy Policy
  • Contact
  • Facebook
  • Twitter
  • Instagram
  • RSS
2023 © Dailyraven Technologies Pvt Ltd - All Right Reserved
X
India's No 1 Stock learning Platform
Register Now