Wednesday, December 22, 2010

Tinplate - Target Rs 110

Tinplate is a Tata Steel company basically into tinning business, which is largely used for packaging into the agriculture segment. As we all know the growth in agriculture segment is happening very fast now and a company like Tinplate would definitely have an edge over the imported tin coming into the market today. They have already expanded their capacity to 380000 tones for the tinning and at the same time they have backward integrated themselves into the CR business where again I think the capacity has been expanded to 380000 tones and which is going live in this particular part of the financial year.

He further added, "From the prospective of seeing higher amount of growth in this particular company, the company is likely to see maximum amount of benefits going forward in the next financial year where the growth of backward integration, the integration will probable play its role in the coming year and there after. Most importantly with the Corus in, they are having access to the sophisticated technology, which is required in the European market, which would end up giving them higher amount of value addition in the business. The company is available at just 6x its price-earnings ratio and we believe that on an EPS of Rs 11-12 in the next financial year, the company should end up with a target of about Rs 110-120 levels. So current level onwards, I think there is a decent amount of appreciation in next 12-18 months."


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