Tuesday, September 14, 2021

Tinplate Company of India Ltd ( 504966 ) – Betting big on tinplate

Tinplate Company of India Ltd ( 504966 ) closes   at 282.90 with  a  Gail   of   +1.10 %   on    on    14-September-2021  with formation of  a  Small Red Candle    on Daily  Price Chart.

About the Company :  The Tinplate Company of India Limited (TCIL) is an India-based producer of tin coated and tin free sheets. The Company manufactures various grades of electrolytic tinplates, tin-free steel sheets and full hard cold rolled sheets (FHCR) used for metal packaging. The Company's product range includes Electrolytic Tinplate (ETP) line and Cold Rolling Mill (CRM) products. The Electrolytic Tinplate line products include single reduced tinplates, Open Top Sanitary Cans (OTSC), tin free steel and double reduced tinplate sheets. The CRM products include hot rolled pickled coils, full hard coils and temper rolled/double reduced (Dr) coils. The Company's works is located at Jamshedpur, Jharkhand and has over 11 offices in India and a distribution network with approximately 20 stocking points.

Sector Update :  Positive

Refinitiv  Average Score : 9

Financials : Tinplate Company of India Ltd has posted Net Sales / Revenue   of 2281.00Cr & Net Profit 98.00 Cr in FY2021 and expected to post Net Sales / Revenue   of 2768.00 Cr & Net Profit of 174.00 Cr in FY2022 .

Cash Conversion Cycle has improved to 19Days in FY2021 from 44days in FY2020, which resulted in Net Cash Flow turning Positive of ₹73.00 Cr. ROCE is 17% and EPS will improve from 9.38 in FY2021 to 16.61 in FY2022.

Valuations  : The Company is now Trading at X1.70 of its  valuations of  FY2021 earnings with ~70% Premium and X1.04  of its FY2022 earnings with ~0.04% Premium.

Margin of Safety (1Yr Bond Yield: Value>1 ) is now  0.90  which  makes is attractive after ~10% dip in price. The  Equity Value Per Share ( Enterprise Value Method ) is  262

Early Trend: 1. Steel producers are ramping up capacity in tinplate with an increase in out-of-home consumption and implementation of quality control measures.

2. The industry has been growing at a CAGR of 5-6 per cent. But with institutionalizing of retail, growth could be much higher in future.

3. Effective July 17, 2021, the government has enforced Steel & Steel Products’ (Quality Control) Order, mandating usage of prime grades of BIS certified tinplate.

4. Domestic prices are currently lower than international prices. Even though it may not make commercial sense to import right now.

If We factor its FY2022 earnings/valuations, its Price arrives at 457.00

Disclaimer : We are / may going to take exposure shortly.

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Data Source NSE Website | Screener.In  | Capital Line Money Control |Refinitiv |

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