Tinplate Company of India - Rs.60.00

Incorporated in 1920, Tinplate Co. of India Ltd (TCIL), an associate company of Tata Steel, is engaged in the manufacture and marketing of tinplate to provide cost-effective metal packaging solutions for processed products. Today, this 80 years old company is the country’s largest indigenous producer of tinplate with a market share of over 35 per cent. Apart from cold rolled products in coil form, TCIL basically manufactures electrolytic tinplates/tin free steel for can fabrication to pack edible oils, processed foods, dairy products, beverages, pesticides, paints and for manufacturing battery components. It also exports to select customers in some markets in the Far East, South East Asia, West Asia, Europe and neighbouring countries like Nepal, Sri Lanka which constitutes around 25% of its total turnover. TCIL is an ISO 9001:2000 and ISO1400: 1996 certified company.

TCIL’s plant is located at Jamshedpur having two units: a combination line of electrolytic tinplate (ETP)/tin-free steel (TFS) and a cold-rolling mill (CRM). It also has a two-stand (double cold rolling) DCR mill backed by state-of-the-art technology obtained from SMS of Germany and UEC of USA for the manufacture of DR tinplates. The company has recently made technical tie ups with French major Arcelor and Japan giant, Nippon Steel, as consultants for process and technology improvements. For cost-competitiveness, TCIL has adopted the double reduction route for manufacturing lighter and thinner tinplate. Currently, its capacity of ETP (electrolytic tinning plant) stands at 1,50,000 TPA. To cater to the increasing demand TCIL is setting up a greenfield project with state-of-the-art tinning line in Jamshedpur at an investment of Rs.100 cr. Besides, it is already implementing a phase-wise expansion programme of its existing unit and intends to take its total capacity to around 4,00,000 TPA in the next few years.

Incidentally, the company has wiped out all its accumulated losses in FY05 and its book value now stands positive at Rs.12 per share. Although its Sales reported a degrowth of 12% to Rs.253 cr. its NP increased 43% to Rs.30.50 cr. due to better operating efficiency and lower interest cost. TCIL is regularly restructuring to replace its high cost debt by low interest loans, which will result in further reduction of interest cost. With the company’s thrust on innovative products and increasing exports it can post Net Sales of Rs.325 cr. and NP of Rs.40 cr. leading to an EPS of Rs.14 for FY06. Investors are advised to accumulate this scrip only at sharp declines with an expectation of 50% appreciation in 12~15 months.