At a Glance
TCPL Packaging, India’s folding carton king, posted a Q1 FY26 profit of ₹22.3 Cr, down 30% YoY, despite revenue inching up 4.7% to ₹424.7 Cr. Margins stayed at 17%, but rising interest costs and new plant expenses bit into the bottom line. Stock trades at P/E 25, with ROE of 24% still packing a punch. Growth story intact? Or are profits getting packed away?
Introduction
The market loves a good packaging story, until the tape starts peeling. TCPL rode high on 31% CAGR profits over five years, but this quarter it got bubble-wrapped in red flags—higher finance costs, muted EPS, and a profit plunge that made investors question if the Chennai plant was a gift or a curse.
Business Model (WTF Do They Even Do?)
TCPL makes folding cartons, printed blanks, blister packs, litho-lamination, and flexible packaging. Think of every toothpaste box, cigarette pack, and snack carton you’ve ever opened—TCPL probably made it. Recently, they’ve expanded into flexible packaging (laminates, sleeves, labels).
Revenue Sources:
- FMCG cartons – bulk of sales
- Flexible packaging – growing segment
- Export orders – slowly contributing
Margins hover at 15-17%, thanks to scale, but the industry is fiercely competitive.
Financials Overview
Q1 FY26:
- Revenue: ₹424.7 Cr (+4.7% YoY)
- PAT: ₹22.3 Cr (-30% YoY)
- EBITDA: ₹71 Cr (flat)
- EPS: ₹24.9 (vs ₹38.8 YoY)
FY25:
- Revenue: ₹1,696 Cr
- PAT: ₹141 Cr
- ROE: 23.8%
- ROCE: 20%
Comment: Sales up, profits down—thanks to higher interest (₹26 Cr vs ₹17 Cr).
Valuation
- P/E: 25
- P/B: 5.07
- ROE: 23.8%
Fair Value Estimate:
- P/E Method: EPS FY26E ₹145; fair P/E 22 → ₹3,190
- P/B Method: BV ₹713; fair P/B 4.5 → ₹3,200
- DCF: Growth 12%, discount 11% → ₹3,500
Fair Value Range: ₹3,200–₹3,500 (CMP ₹3,620 ≈ slightly expensive).
What’s Cooking – News, Triggers, Drama
- Q1 profit fell 30% despite revenue growth.
- New Chennai plant operational – near-term cost spike, long-term volume booster.
- Trigger: Ramp-up of flexible packaging could revive margins.
- Drama: Interest cost rising fast—watch debt.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 1,568 |
| Liabilities | 305 |
| Net Worth | 649 |
| Borrowings | 614 |
Roast: Borrowings climbing like your gym trainer’s expectations.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Ops | 119 | 236 | 140 |
| Investing | -101 | -182 | -157 |
| Financing | -18 | -51 | 19 |
Roast: Operating cash shrank 40% YoY—capex eating cash like popcorn.
Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 23.8% |
| ROCE | 20.0% |
| P/E | 25.0 |
| PAT Margin | 17% |
| D/E | 0.39 |
Verdict: Strong returns but leverage creeping in.
P&L Breakdown – Show Me the Money
| (₹ Cr) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | 1,432 | 1,491 | 1,696 |
| EBITDA | 236 | 249 | 287 |
| PAT | 118 | 102 | 141 |
Roast: Revenue up, PAT recovering—until Q1 FY26 threw a spanner.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| EPL Ltd | 4,213 | 362 | 20 |
| AGI Greenpac | 2,650 | 348 | 18 |
| Uflex | 15,036 | 240 | 18 |
| TCPL Packaging | 1,715 | 132 | 25 |
Roast: TCPL trades at premium P/E vs peers—priced for perfection.
Miscellaneous – Shareholding, Promoters
- Promoters: 55.7% (stable)
- FIIs: <1% (meh)
- DIIs: 11.6% (increasing)
- Public: 31.5%
EduInvesting Verdict™
TCPL is a premium packaging play—great ROE, strong growth track, but Q1 FY26 profit drop and rising interest cost are red flags. The Chennai plant expansion means short-term pain, long-term gain.
SWOT
- Strengths: Market leader, high ROE, sustainable packaging push.
- Weaknesses: High capex, margin pressure, debt creeping in.
- Opportunities: Flexible packaging growth, export demand.
- Threats: Raw material costs, pricing pressure from FMCG clients.
Final Take: At ₹3,620, the stock is priced for perfection. Any further profit slip, and the market might just… tear it open.
Written by EduInvesting Team | 31 July 2025SEO Tags: TCPL Packaging, Folding Carton, Q1 FY26 Results
