The packaging industry plays a crucial role in various sectors, from consumer goods to pharmaceuticals, providing essential materials for product safety and presentation. In India, several packaging companies have shown remarkable growth in recent years. This article delves into the top five packaging stocks based on their market performance, profitability, and financial metrics.
| Name | Market Cap (Rs crore) | Price to Earning | OPM Growth YoY | Debt YoY | Return on equity | Return over 1 year |
| AGI Greenpac | 4,577.03 | 18.23 | 15.18% | -15.78% | 14.69% | 23.52% |
| Huhtamaki India | 2,822.60 | 25.89 | 39.70% | -37.87% | 13.04% | 36.88% |
| TCPL Packaging | 2,374.22 | 22.26 | 1.82% | 2.02% | 21.48% | 80.00% |
| Everest Kanto | 1,426.75 | 14.37 | 4.38% | -31.63% | 9.47% | 4.99% |
| Sh. Rama Multi. | 375.02 | 37.66 | 14.98% | -84.06% | 15.04% | 114.79% |
AGI Greenpac stands out with a market cap of Rs 4,577.03 crore and a price-to-earnings (PE) ratio of 18.23, slightly higher than its historical three-year PE of 14.93. The company’s sales growth over three years is a commendable 24.32%, while profit growth is even more impressive at 42.09%. AGI Greenpac has also achieved an operating margin (OPM) growth of 15.18% year-over-year (YoY), and cash flow growth of 12.61% YoY, despite a debt reduction of -15.78%. The return on equity (ROE) is strong at 14.69%, and return on assets (ROA) stands at 7.76%. Over the past year, AGI Greenpac has delivered a return of 23.52%, reflecting robust investor confidence.
Huhtamaki India, with a market cap of Rs 2,822.60 crore, has a PE ratio of 25.89, which is significantly lower than its historical PE of 36.04. The company’s three-year sales growth is modest at 1.16%, and profit growth is 9.86%. However, its OPM growth of 39.70% YoY and an astounding cash flow growth of 106.24% YoY set it apart. Despite a debt reduction of -37.87%, Huhtamaki India maintains an ROE of 13.04% and an ROA of 6.63%. The stock has yielded a return of 36.88% over the past year, demonstrating strong financial health and operational efficiency.
TCPL Packaging has shown remarkable performance with a market cap of Rs 2,374.22 crore and a PE ratio of 22.26, closely aligning with its historical PE of 15.68. The company’s three-year sales growth is 18.02%, and profit growth is a significant 47.10%. Its OPM growth is 1.82% YoY, and cash flow growth is an impressive 89.52% YoY. Despite a slight increase in debt by 2.02%, TCPL Packaging boasts a high ROE of 21.48% and an ROA of 8.72%. Over the last year, the stock has delivered an impressive return of 80.00%, reflecting its strong market position and operational performance.
Everest Kanto, with a market cap of Rs 1,426.75 crore, has a PE ratio of 14.37, slightly above its historical PE of 12.21. The company’s three-year sales growth is 8.82%, and profit growth is 15.54%. Everest Kanto has achieved an OPM growth of 4.38% YoY and an extraordinary cash flow growth of 113.44% YoY. Despite a debt reduction of -31.63%, the company maintains an ROE of 9.47% and an ROA of 7.09%. However, the stock has shown a modest return of 4.99% over the past year, indicating a more conservative investor sentiment.
Sh. Rama Multi., with a smaller market cap of Rs 375.02 crore, has a higher PE ratio of 37.66, compared to its historical PE of 42.38. The company’s three-year sales growth is 9.38%, and profit growth is a substantial 40.65%. OPM growth stands at 14.98% YoY, and cash flow growth is a remarkable 680.52% YoY. Despite a significant debt reduction of -84.06%, the company has an ROE of 15.04% and an ROA of 7.33%. Over the last year, Sh. Rama Multi. has delivered an exceptional return of 114.79%, underscoring its potential despite higher risks.
Conclusion
Among the vast universe of packaging companies, these five have showcased positive growth in sales, profit, cash flow, operating margins, and debt reduction. AGI Greenpac and Huhtamaki India show strong and consistent growth, making them reliable options for steady returns. TCPL Packaging’s impressive profit and sales growth, coupled with strong operational metrics, make it an attractive choice for growth-oriented investors. Everest Kanto offers robust cash flow growth, though its overall returns are more moderate. Sh. Rama Multi. stands out for its high returns despite debt challenges, making it a high-risk, high-reward option.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.
Published on: Jun 27, 2024, 6:02 PM IST
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