Hindustan Tin Works
Hindustan Tin Works

Ever since India adopted open-door policy in early nineties, consumerism has been boosted as multinational giants came with better technology, fresh marketing initiatives and product innovation.

One of the most positively affected sectors was FMCG as global giants entirely changed dynamics of product packaging, which has been ailing with inferior quality of material and poor packaging technology in India earlier.

What was available in an unpackaged condition is now available in an attractive and strong packaging. Metal packaging also found strong foothold as industries like pharmaceutical, food processing, manufacturing industry, healthcare and ancillary sectors were booming in the emerging economies like China, India, Brazil, Russia and other East European nations.

In this scenario, Hindustan Tin Works Ltd. (HTW) was clocking a continuous profit with a remarkable performance. Hindustan Tin Works mainly deals into metal packaging; the company manufactures food closures, sanitary ends, paint closures, and composite can closures.

The 57-year old company is producing packaging cans for leading brands like Britannia, Amul, Nestle, Asian Paints, Reebok and others. These all are consumer products, which are consumed by millions of people in India every day. Day by day, demand for these products is increasing, and thereby, packaging of the same products is the need of packaged food brands.

In addition to this, more and more packaged food brands are coming into Indian consumer market, which again calls for the need of metal cans. Hindustan Tin Works has got another advantage of recycling the packaging cans. Since the tins are made of steel, they can easily recycle those trashed cans. Hindustan Tin Works has taken initiatives to collect trashed cans and process them to reuse the tins. This will not only save Earth’s natural resources but also increase Hindustan Tin Works’s profit margin.

Hindustan Tin Works’s stock is undervalued; it is traded at Rs 57/- and its current Book Value is Rs 114/-. Hindustan Tin Works’s current P/E is just Rs 4.69.

The table below explains strong performance of Hindustan Tin Works.

For the Fiscal Period Ending   12 Months Mar-31-2002 12 Months Mar-31-2003 12 Months Mar-31-2004 12 Months Mar-31-2005 12 Months Mar-31-2006 12 Months Mar-31-2007 12 Months Mar-31-2008
Total Revenue Million 1,142.6 1,161.5 1,306.6 1,444.8 1,510.6 1,747.5 1,881.4
Net Profit Million 21.3 16.2 16.0 25.7 32.0 56.6 35.1
Book Value 54.98 57.26 59.58 59.65 59.57 57.95 59.26
Stock Price (as on April) 8 9 13 34 55 35 35
For the Fiscal Period Ending   12 Months Mar-31-2009 12 Months Mar-31-2010 12 Months Mar-31-2011 12 Months Mar-31-2012 12 Months Mar-31-2013 12 Months Mar-31-2014 12 Months Mar-31-2015
Total Revenue Million 2,478.2 2,881.5 2,947.8 2,466.4 2,728.2 3,136.3 3,195.5
Net Profit Million 66.9 114.6 112.8 56.9 73.5 84.1 85.6
Book Value 63.7 72.5 81.72 86.38 92.86 100.01 105.04
Stock Price (as on April) 30 132 74 68 25 49 69

From the statistics presented above, it is crystal clear that once Hindustan Tin Works achieves profit of Rs 11 crores (as the company achieved in year 2010 and 2011), the stock price of Hindustan Tin Works will reach around Rs 132/-. If you are planning short and long term investment, Hindustan Tin Works is a good option.

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Jayesh is a writer by design. Alphabets create same impact on him as cheese would create on Jerry the Mouse. His romance with words dates back to the twilight years of 20th century when he lost his heart to Miss British Lingo. He loves to write on Digital Marketing, Advertising, Branding, Language, and Entertainment.