Over the past three years, TCPL Packaging has emerged as a standout performer in the stock market, demonstrating an impressive share price appreciation of more than 480%. This remarkable growth translates into significant returns for its shareholders. TCPL Packaging specializes in manufacturing folding cartons and flexible packaging, catering to diverse sectors such as food and beverage, electronics, pharmaceuticals, liquor, FMCG, and tobacco. The company’s expertise positions it among the top three players in terms of installed capacity for folding cartons, while it also offers innovative solutions in flexible packaging.
InCred Equities, a notable brokerage firm, has recently initiated coverage on TCPL Packaging’s stock, assigning it a high-conviction ADD rating with an ambitious target price of ₹4,250. The firm views TCPL Packaging as a viable alternative investment within the domestic FMCG sector, making it an attractive option for investors looking to diversify their portfolios.
According to InCred Equities, the analysis anticipates a revenue and EPS compound annual growth rate (CAGR) of 12% and 20%, respectively, from FY24 to FY27. The brokerage assigns a 22x multiple on the projected FY27 EPS of ₹192.3, leading to their target price of ₹4,250. This calculation reflects confidence in the company’s ability to sustain growth in a competitive market landscape.
The firm maintains a positive outlook on the robust growth prospects of TCPL Packaging, especially in the context of the FMCG industry, which has recently faced slow volume expansion. However, signs of recovery are expected to manifest gradually starting from FY25. Nonetheless, the brokerage cautions that potential risks could arise from EBITDA margins declining more than anticipated, primarily due to a gradual shift in sales towards flexible packaging products.
Technical Analysis: Buy, Sell, or Hold?
As of the latest trading session, TCPL Packaging’s share price opened at an intraday high of ₹3,487.40 on the BSE, dipping to an intraday low of ₹3,205.60. Remarkably, the stock experienced an 8.5% surge today. However, it has seen a decline of approximately 5% over the past week, prompting questions about the stock’s short-term trajectory.
Ruchit Jain, Lead Research Analyst at 5paisa, notes that while the stock appears to be in a short-term corrective phase, the overall long-term trend remains positive. He advises investors to consider buying the stock on dips, with support anticipated around ₹3,000.
Additionally, Rajesh Bhosale, an Equity Technical and Derivative Analyst at Angel One, observes that despite Monday’s volatility, TCPL Packaging’s share prices are maintaining key support levels indicated by the 50 EMA, positioning them in mildly positive territory. Currently, the stock is trading within a range, with ₹3,200 serving as a critical support level. Investors with long positions are advised to hold, establishing stop-loss orders at this level, while ₹3,400 is identified as a significant resistance point.
Disclaimer: The insights and recommendations provided are solely those of individual analysts, experts, and brokerage firms, not reflective of Mint. Investors are encouraged to consult certified financial experts before making any investment decisions.
