Stock Review: Tinplate Company of India

Tinplate Company of India will benefit on account of its recent agreement with its promoter group company, Corus (Tata Steel Europe), one of the largest tinplate players in the world. While it will leverage on the expertise of Corus, the deal will also lead to higher exports (currently 25 per cent of revenues) of tinplate, used for packaging products. Back home, it has a 35-40 per cent market share in this business, expected to grow at a healthy pace. There are large opportunities in India for packaged food and edible oil, which will grow as per capita consumption improves. The company has more than doubled its capacity to 379,000 tonnes and is almost doubling its cold rolling mill capacity to 380,000 tonnes by the end of 2010. This will help in higher revenue growth and in margin expansion.