Saturday, September 20, 2014

HINDUSTAN TIN WORKS LTD - POWER PACKED






     

Recently  we discussed two stocks from different verticals in packaging Industry. Polyplex from Polyester film based and Mold Teck Packaging from IML packaging sector . This week let us look into another company from a related sub sector – Metal packaging .Even though plastic packaging is gaining more acceptance ,some products still need metal packaging due to  special characteristic of products to be packed. Chemical reactions, keeping right nutritional / aesthetic values, requirement of extended shelf life ..etc compelling the producers of certain products to prefer metal packaging.This  situation ensures  enough room for metal packaging majors to grow though the chances for new entrants are bleak. At present, metal packaging commanding a 10 % market share of  total consumer packaging market. In this background, let us look into Hindustan Tin Works Ltd which  commanding  20 % of metal packaging market in India. HTWL manufacturing tin/metal cans and closures used in packaging of baby foods, edible oils,paints, ghee, canned food items, fruit pulp,juice,protein powder, shoe polish  etc. Company mastered in Aerosol cans and Beverage Cans . Aerosol cans are mainly used to pack Deodorants, Room Fresheners,Pesticides,paints and industrial products .Beverage cans are used to pack Juices,Flavoured milk and other beverages.Longer shelf life without refrigeration and leakage is an added advantage of beverage cans .Company’s major consumers includes the who is who of FMCG  and Food Industry like GSK consumer, Nestle, Britannia, Del-Monte Foods , Asian Paints,Reebok ..etc.

Company reported a top line of Rs.314 Cr , bottom line of Rs.8.5 Cr and an EPS of Rs.8 in last FY .Current book value of company is over Rs.100.Promoters holding 40 % stake and world’s largest steel trading group Switzerland based Stemcor A G holding another 10 % stake in this company.Now,  management  aggressively tapping emerging  opportunities by developing new products and entering into more overseas markets. The potential of Indian food processing Industry , softening of metal prices,revival of economies and company’s new initiatives are expected to drive the growth momentum forward.This market leading can maker is currently trading with a market cap of less than Rs.70 Cr and a P/E multiple of  8 .Stock is currently trading 30 % discount to its book value of Rs.100 . I believe ,it is one good stock which listed only in BSE and CMP around Rs.70


Link to Company Website HERE 

Disc: It is safe to assume that I have vested interest in HTW


 













   
 

104 comments :

  1. Good pick.Growing urbanisation proxy for package sector?

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  2. General que. Do you think trading trading business (like aimco, caplin) is more sustainable than manufacturing ( like granuls astec) ? Plz publish and share your views.

    ReplyDelete
    Replies
    1. I don't think there is anything wrong in such asset light business models if they can ensure quality .Even big companies like TTK Prestige ..etc are doing the same to a great extent . By this ,they can effectively utilise their assets for brand building,after sale service and other marketing related activities.The key is -- quality should not be compromised and the supply source should be reliable without any interruption.

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    2. Thanks for such a precise answer.

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  3. VP Sir, Your stock picking skills are awesome and your help for investor community is at sky level. As a person you are down to earth.
    I invested your recommendations earlier (i.e. before Feb) but these days (except Koran) I am not able to buy because of UCs. I cannot buy stocks before 10:30 AM because I work for a MNC Financial company where I have certain restrictions. By the time I got the required approvals, the stock locked in UC for the day. Same story repeat for a week or so.
    After a week of your recommendation (i.e. after all UCs ) all your picks appreciate minimum 50%to 60% and I am not sure whether to buy them at those levels. But I am happy that so many investors (like me) can get benefit from this blog.
    All the best Sir and all best for our blog readers.

    Thanks
    Venkata

    ReplyDelete
    Replies
    1. Euphoria is not good in any case. One should analyse the company in detail and decide upto which rate a stock is worth affodable based on one's risk profile.If the price is beyond that level ,better to skip. This level may be different from paerson to person.

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    2. value invester jee.
      i m big fan of you. luckly i hold hind tin from long time.i always make money on your recomandation but whenever you recomand any scrip scrip goes in UC and very dificult to buy it.
      keep it up

      Delete
  4. Hello sir , im worried about the debt of the hindustan tin works? Whats ur view, plz reply...

    ReplyDelete
    Replies
    1. It depends on one's risk taking capacity. If you are worried about a company with debt equity ratio of 0.7 without any promoter pledge , you have full freedom to avoid .

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  5. Thank you Sir for a good recommendation

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  6. thanks for help small invetor

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  7. Thanks for your good recommendation sir. Curious to know who else are its closest competitors. If i try to get a peer group view on various websites there are a lot of companies which are classified under packaging industry. I am just trying to figure out as to who are the closest competitors in Metal packaging.

    ReplyDelete
    Replies
    1. I don't think there is any strictly comparable peers. Tinplate company of Tata group manufacturing OTS cans but their major income coming from Electrolytic Tinplate sheets.

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    2. KAIRA CAN COMPANY is a comparable peer.

      Delete
  8. Sir Can i buy Panama Petrochem at current levels? Currently Stock is present @60 but book value is Rs.290 also available at 12.6 where as industry pe is around 37. Promoter holding is more than 45%. Also with EPS of 19.10 for FY 14.

    ReplyDelete
    Replies
    1. I think the data is wrong which not reflecting the effect of recent stock split in book value.

      I recommended this stock @ Rs.135 when its FV was Rs.10 .Now FV is Rs.2 and market price is around Rs.60 which means stock already appreciated more than 100 %

      http://value-picks.blogspot.in/2013/01/panama-petrochem-ltd-buy.html

      Delete
  9. very good company good fundamental too.

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  10. Dear VP,
    Kindly share your views on holding companies like Bengal Assam, Bombay Burmah , Tata Investments. ., if any
    Regards
    Vimal

    ReplyDelete
    Replies
    1. I am not a big fan of holding companies. We should distinguish Holding companies and Investment companies. Many of the listed holding companies in India are holding the shares of their own group companies. They can't sell these shares because of chance of loosing control. So they will not sell shares and realise profit .Only income is dividend from shares .Here in our country,take over attemps by rivals are very rare .So it it is not attractive even in that way . Otherwise management's of such companies should do value unlocking through de-mergers or so .

      Delete
    2. Dear vp sir, Pls give ur view on KENAMETAL & FORBES
      Thks in advance

      Delete
  11. Sir. Please share your views on vinyl chemicals india ltd if you are tracking it

    ReplyDelete
  12. sir, please share ur view for india gelatine

    ReplyDelete
    Replies
    1. It is an already recommended company @ Rs.66

      http://value-picks.blogspot.in/2012/07/india-gelatine-chemicals-ltd.html

      Delete
  13. Not a single pledge
    http://www.bseindia.com/corporates/sastpledge_new.aspx?scripcd=530315

    And also DE ratio is 0.75

    Thank you for the script

    ReplyDelete
  14. How to buy high PE companies?
    Eg; If the company PE @ 35. Industry PE@ 25. Assume, Its ROE @ 30, ROCE @ 50. can we buy the stock ? Means we buy the stocks based on ROE or ROCE?

    ReplyDelete
    Replies
    1. Trailing P/E is only an indication based on the past

      Delete
  15. Sir, what is your view on infinite computers?

    ReplyDelete
  16. Sir Please share your views on Kitex Garments ... I am holding it from Rs 330 level

    ReplyDelete
  17. Sir..hows manjushree technopack..they are in plastic packaging

    ReplyDelete
    Replies
    1. Not tracking any of the companies mentioned in above three messages.

      Delete
  18. Dear Sir,Kindly share your views on KAJARIA & VIP

    ReplyDelete
    Replies
    1. Positive on kajaria ,not tracking VIP.

      Delete
  19. Hi vpji I researched Hindustan tin excellent pick!hats off to your stock picking.I am trying to place order to buy bcoz Monday it will shoot up.it is giving error data not available. Can't we place order for it.thanks keep the good working going.
    Regards
    AJINKYA M

    ReplyDelete
  20. VP sir,
    My comment is never published. PLEASE Let me know about ANUH PHARMA. whats your view on it...

    ReplyDelete
    Replies
    1. Please dont insist like that , replay for similar question about same stock answered against some other readers query. I am not tracking it.

      Delete
  21. Sir what is your view on allied digital services...?

    ReplyDelete
  22. Dear Vp sir . Please share ur view about CENTURYPLY .

    ReplyDelete
  23. Sir, Please share your view on menon bearing and CCL products

    ReplyDelete
  24. Please let me know your views on Virat Crane Industries, if you track it

    ReplyDelete
  25. Please let me know your views in Shetron Ltd if you track it

    ReplyDelete
  26. Sir. Pl share your views on arvind remedies

    ReplyDelete
  27. Dear Sir,

    Do you track an auto ancillary company called Omax Autos which has turnover of 1000 Cr but trading at a market cap of just 100 Cr. Company seems to have large assets and the book value is very high. All auto ancillary companies have appreciated substantially and this stock available at mouth watering valuations. Please let me know your opinion about this stock for medium to long term.

    Regards,
    Jay

    ReplyDelete
    Replies
    1. Not tracking Omax Autos. Talbros Auto is a decent pick from this sector.

      Delete
  28. So many times asking for you but no respond again please your view upon nitin fire and exide ind

    ReplyDelete
  29. Dear Mr.VP
    Could you pl provide the views on Stylam industries which we would like to know,
    thanks in advance

    ReplyDelete
  30. your view on Harita seating your old reco?

    ReplyDelete
  31. dear vp sir
    your old pick jkagri finally firing and also Florence investech :)

    ReplyDelete
  32. Good Morning Sir, what's your view on Network 18 or Media sector?

    ReplyDelete
  33. Dear VP,
    Thanks for new pick. What is your view on Ingersol Rand I am holding it from 480 level. Your views will be helpful for me to decide. I am ready to hold.

    ReplyDelete
    Replies
    1. Already recommended @ Rs.450

      http://value-picks.blogspot.in/2010/11/ingersoll-rand-buy.html

      Delete
    2. Sir,
      Based on your recommendation and my study, I bought at around 480. I just wanted your view at present whether to hold or book profit. Plz. comment.

      Delete
  34. Hello VP Sir.. Wanted to know your views on Kiri Industries & Cigniti Technologies for a Long Term Basis.. Say for a years time..

    ReplyDelete
  35. sir what is you are view on time techno,& neo carp

    ReplyDelete
    Replies
    1. Not tracking the cos mentioned in above two queries.

      Delete
  36. Dear VP Sir,

    I would like to have long term views on ALSTOM PROJECTS due to FE deal world wide and future growth potential in hands of GE.
    Need your long term views on FDC after amalgamation of 3 subsidiary companies with FDC. I have high opinion on management quality about both companies.

    ReplyDelete
  37. Sir, what is current view in Panacea Biotec? AGM is nearing and share placement likely in reasonable future. Can we add or just hold?

    ReplyDelete
    Replies
    1. Those holding from lower level should hold. For fresh entry one need to consider their fund raising plans.

      Delete
  38. Helo sir,

    Kindly let me know ur views on gitanjali gema, rei agro, india bulls power and suzlon. It wil be very helpful.

    Thanks.

    ReplyDelete
    Replies
    1. Tracking only Suzlon , risk takers can still hold if having a 2 + year view.

      Delete
  39. hello sir, your views on CERA and HAWKINS COOKER?

    ReplyDelete
    Replies
    1. Suitable for long term passive investors.

      Delete
  40. sir can you please share your views on munjal auto and munjal showcase ?

    ReplyDelete
    Replies
    1. Really sad to see the readers/investors are not even spending few seconds to understand the correct name of companies. There is no company in the name " MUNJAL SHOWCASE " . It is Munjal SHOWA Ltd
      :((((

      Delete
  41. Trying my luck third time..... Plz share your view on Electrosteel Casting ltd

    Thanks in advance.....

    ReplyDelete
  42. Hello VP Sir,
    It would be helpful i you can plz post/reply to my query. I have already tried submitting it twice but it has not been approved by moderator. Reposting the query again:

    Dear VP Sir,
    I came across your blog recently. Your stock picking abilities are really amazing. Thanks for doing such wonderful service for retail investors like me.
    However, if possible, it will be helpful is you can provide some info on HTW:
    1) The revenue seems to be stagnant at around Rs.300 cr (+- 10%) from FY 2010 till FY 2014. Request you to plz. provide some more details about their focus on emerging markets that will lead to growth in revenue going forward.
    2) D/E is perse not high. However, debt has increased in FY 2014. Is it because of any capacity addition?
    3) Valuation is attractive at P/E of 8. However, is it low because of lower ROE/ROCE and almost stagnant revenue?
    Your views on above points will be helpful.
    (Financials seen from moneycontrol website).
    Thanks & Regards
    Saurabh

    ReplyDelete
    Replies
    1. In last three years top line improved from Rs.246 Cr to Rs.314 Cr . We should consider the pathetic economic situation worldwide during past few years along with this .Even in such a situation company could report satisfactory numbers . Now I believe , growth will come back going forward and metal price will be steady .Any growth in consumer spending will indirectly help the company.Due to muted demand growth HTWL could not pass increase in cost to its customers in last few years , this may change in future.

      There is not much increase in long term borrowings , total debt level increased only due to increase in short term loan for working capital availed on the personal gurantee of three promoters.

      Delete
    2. Sir Plz share ur views on Whirlpool n Punj Loyd

      Delete
  43. Respected Sir
    I am a homeopath in delhi and very big fan of yourself for your hard work and Reseach and humbly sharing it with others ,Sir i want to know about new emerging company AVT NATURALS which is listed in FORBES list of best 200 companies if u can i shall be oblidged.

    ReplyDelete
    Replies
    1. Pls, pls dont waste VP's time, why dont you search this blog b4 writing ? AVT was recommended long time ago, but now not favoured, the reason also u will find if u use search option.
      http://value-picks.blogspot.com/search?q=avt

      Delete
  44. VP Ji, i am your new follower, wish to know your views on Repro India and Sasken Communications?

    ReplyDelete
  45. Sir I missed to buy Suzlon when you recommended earlier.. Can it be bought now? I am extreme long term investor. Regards

    ReplyDelete
  46. If it is not confidential , do you mind sharing what was the question you asked Bilcare and what response they gave

    ReplyDelete
  47. Hi Sir,

    Trying my luck again as this stock has started showing growth since past a few weeks. Parabolic Drugs from pharma sector. What are your views on this stock?

    ReplyDelete
  48. Vp g
    Whats ur view on "enkei wheels"

    ReplyDelete
  49. sir,when u recommend the stock it got an upper circuit so there is no profit for us! sorry to say but these calls are of no use.

    ReplyDelete
  50. Sirjee, Do you track Prima Plastics, if so could you please share yuor view on this stock on a long term investors point of view.

    Thanks

    ReplyDelete
  51. Dear sir..

    What is your view on Mirza international and Dynemic products

    ReplyDelete
  52. Sir, Could you please guide to understand what does Contingent Liabilities mean.

    Thanks

    ReplyDelete
    Replies
    1. Contingent liabilities means they are not the actual liabilities but they can become actual lliability for the company at a future date on certain circumstances. Ex: Bank guarantee issued by the bank on behalf of the firm to third party is a contingent liability on bank's balance sheet. But when the firm fails to meet the performance the third party will claim the compensation from the bank and the contingent liability will become actual liability.

      Delete
    2. Here you go - http://www.investopedia.com/terms/c/contingentliability.asp
      google would hav answered :-)

      Delete
  53. Sir I think my previous message did not reach you...I had a query on srei infra, nmdc and south Indian bank... Could you please give your comments...thanks

    ReplyDelete
  54. How is IDFC from long term pespective (2 years or more)?

    ReplyDelete
    Replies
    1. Already recommended stock , use search option.

      Delete
  55. Sir,

    What are your views on

    1. Kanpur Platipacks
    2. AMD Industries

    Both are from packaging sector. It this good level to enter these stocks?

    Thanks.

    ReplyDelete
  56. Sir please reply my msg. I m trying for third time. I want to know abt neo corp int. And whether we can compare it with hind. Tin.thank you

    ReplyDelete
    Replies
    1. Not tracking this stock. Any idea why promoter holding is too less ?

      Delete
  57. Hi Vp
    I see no pont in giving calls if they are to benefit retail investors. The moment you give a call there are no selleres and hence UC. Then the stock appreciates 40-80% and then it holds very less meaning to get into it..
    Will it be possible for you to give calls randomly without announcing when you are doing that...
    I beleive this willl lead to graduall buying and selling which is good for everyone unless you want it to move in UC's only....
    Hope this gets published

    ReplyDelete
    Replies
    1. Reason explained at least ten times . See reply below the posting of Capital First

      Delete
  58. Hi VAluepick
    What are yuor views on Aro Granite industries?
    Thanks

    ReplyDelete
    Replies
    1. My stand on Granite and Marble companies already mentioned below the posting of SMS Pharma - Update today morning itself.

      Delete
    2. Sorry VP could not find it..

      Delete
  59. Amazed to see people r still asking quries about other stocks ....why u people cant invest and sit quite in vp sir recommendations. ....many of which r still at very attractive valuations.....how much money u people have to invest in?????

    ReplyDelete
  60. Hi VP Sir,

    How do you read the quarterly result of Hind Tin Works? From what I read, it doesn't look convincing to me.

    Regards
    Srigopal Daliya

    ReplyDelete
  61. Dear VP

    Whats your take on sale of Turkey PET plan by Polyplex. Management has opined that the deal will be cash accretive and proceeds will be used to reduce the leverage.

    Regards

    ReplyDelete

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