Stock of this smallcap packaging company has zoomed 130% so far in 2022

TCPL is well positioned to cater to the growing demand for sustainable packaging solutions from leading brands and continues to support efforts towards facilitating a waste-free world.

Shares of TCPL Packaging hit a record high of Rs 1,191.55 and rallied 14 per cent on the BSE in Thursday’s intra-day trade after the company reported robust earnings for the quarter ended June 2022 (Q1FY23). The stock of this smallcap packaging company has surpassed its previous high of Rs 1,107.20 that it had touched on July 25, 2022.

On a year-on-year (YoY) basis, the company’s standalone revenues grew 48.4 per cent to Rs 335.5 crore and cash profits improved 105.6 per cent to Rs 46.9 crore in Q1FY23. Earnings before interest, taxes, depreciation, and amortization (ebitda) margins, meanwhile, improved 253 bps to 16.0 per cent from 13.4 per cent in Q1FY22.

The management said that TCPL is well positioned to cater to growing demand of sustainable packaging solutions from leading brands and continues to support efforts towards facilitating a waste-free world.

TCPL is mainly engaged in the business of manufacturing printed blanks & outers, folding cartons, litho lamination, plastic cartons, blister packaging, shelf ready packaging, flexible packaging materials etc. The company ventured into flexible packaging industry, with capability to produce printed cork-tipping paper, laminates, sleeves, and wrap-around labels. TCPL has also set-up TCPL Innofilms Private Limited, a wholly owned subsidiary to manufacture blown polyethylene (PE) films.

So far in the calendar year 2022, the stock price of TCPL has zoomed 130 per cent from level of Rs 518.20 on December 31, 2021. In comparison, the S&P BSE Sensex was up 0.33 per cent.

The global packaging industry market size continues to grow mainly driven by increasing demand from end-user sectors such as FMCG, food and beverage, retail, tobacco, e-Commerce, and healthcare industries.

"Looking ahead, a rising young population, growing income levels and changing lifestyles are expected to drive consumption across various industries leading to higher demand for packaging solutions, including the sustainable paperboard-based carton and flexible packaging segment," TCPL said in their FY22 annual report.

The company is now recognized as a leader in its field across segments, hence, the management is very confident of leveraging its existing relationships with leading customers and plans to enter new customer segments to continue high rates of growth.

"Further, the ability to produce recyclable flexible packaging gives the company an edge over competition in the times ahead," TCPL added.