TCPL Packaging surges 14%, hits 52-week high on healthy outlook

The acquisition of COPPL has strengthened TCPL's diverse portfolio with the foray into the high-potential rigid boxes space targeting the growing smartphone & electronics industry.

Shares of TCPL Packaging surged 14 per cent to a hit 52-week high of Rs 694 on the BSE in Friday’s intra-day trade on a healthy outlook. The stock of the sustainable packaging solutions producer has surpassed its previous high of Rs 662 touched on February 6, 2022. It had hit a record high of Rs 780 on June 29, 2016.

At 11:49 am, TCPL Packaging was trading 10 per cent higher at Rs 666, as compared to a 0.21 per cent gain in the S&P BSE Sensex. In the past two weeks, the stock has rallied 28 per cent after the company reported a 20.1 per cent year-on-year (YoY) jump in cash profit at Rs 34.8 crore for December quarter (Q3FY22). Revenues increased by 12.9 per cent YoY at Rs 274 crore.

However, earnings before interest tax and depreciation and amortization (EBITDA) margins declined to 15.2 per cent from 15.6 per cent in Q3FY21, impacted mainly due to rise in input prices that has impacted gross margin during the quarter.

The management said it is looking at various other cost rationalization opportunities at plants nearby. Even as some of the key sectors like FMCG are currently witnessing low single-digit volume growth, the management is confident of growing at a faster pace.

The acquisition of Creative Offset Printers (COPPL) has significantly strengthened TCPL’s diverse portfolio with the foray into the high-potential rigid boxes space targeting the growing smartphone & electronics industry. With the manufacturing plants of both companies in close proximity, TCPL expects to drive various synergies including rationalization and optimization of various costs. TCPL Packaging holds 80 per cent stake in COPPL.

The company’s expansion plans in the flexible division are on course to be completed soon. This combined with revival in demand should enable it to report strong performance in the upcoming fiscal, it said.

On the back of various government policy initiatives taken over the past few years and focus on ‘Made in India,’ India is clearly emerging as a major global manufacturing hub. This structural theme will provide a huge impetus to the organized packaging industry, including the sustainable paperboard-based carton and flexible segments. Giving TCPL’s leadership position in the industry, the management believes the company is well positioned to tap this opportunity.