From today it is a 10% circuit v/s 0% circuit till yesterday

Awesome Nagaraj for contributing to the list
Definitely, I agree one needs to be a hermit to be absolutely ethical.
Some sectors/companies which come to my mind which has high chances of passing through this filter could be:
1) HFCs like Gruh and Repco.
2) Software Industries.
3) Tasty Bites Eatables.
4) Rating agencies like Crisil.

I had a chat with my contact with one of the TCPL competitor, Borkar Packaging. You might find it useful:

Size of opportunity – INR 6,000crs

• Organized – 15%/20% (ITC does mostly for internal consumption)

• Unorganized – 85%/80% (Mostly jobbing work, no big player doing everything under one roof)

Revenue break-up: Borkars: 320crs and Top-3 (Borkars+Parksons+TCPL: INR 1,000crs)

• Last year grew by 20%, can comfortably grow at this rate.

• They have diversified into Food and Liquor

• Innovation helps companies to gain market share but in some time other companies catch up and becomes a level playing field

• Not much demand from E-commerce companies.

Cost & margins:

• 65-70% RM, hence Gross margin of 30-35% ; Break up of rest; 50% fixed and 50% variable

• Margins are difficult to improve as big FMCG companies continues to squeeze margins

• Have EBITDA margins of 12-15%

• Efficiencies can come only If a production line is running for longer time (say 5 hours for one type of product). This generally don't happen as every companies (HUL etc.) gives orders to at least 3-4 players.

Capacity:

• One plant in Goa, Daman and Himachal Pradesh. Goa currently has 3 lines, has capacity of 4 lines.

• Additional line set-up costs 35-40crs, Machine is imported from Europe, Asset turnover of 1x. Takes 2 months to import the machinery

• Mostly runs at 80-90% capacity

• Uses Refurbished machines. Spends on machine maintenance/trainings and hence margins are similar to other companies

How to improve margins

• Gross margins are difficult to improve. Giant FMCG companies squeeze margins.

• Automation can improve margins. For eg: they are trying to automate final sorting of cartons where they need lot of manpower.

Aseptic beverages

• Cost is very high @ 150crs. Tetra Pak has patented the technology

• Parksons acquired a company in the same segment but has not got any break through

Competition

• TCPL is a good company. 2 years back he himself was thinking that TCPL is highly undervalued.

• TCPL does a lot of jobbing work for Godfrey Philips. Promoter has some connection with GP. ~20-25% of revenue must be coming from Cigarettes business.

• He will get back if Parksons or TCPL has expansion plans. He thinks that TCPL has made orders for 2/3 machines.

• TCPL has lot of flexible packaging business and hence their margins are better.

Discl: Holding TCPL from lower levels. Added more ~2months back.

In my opinion, this discussion of ethical business is futile. The reason being, man is heavily dependent on animals for a living. Everyone's definition varies on what is "ethics". Ethics is rather, whatever suits oneself based on what is commonly agreed upon by a majority of people. Let me list products that use animal products, the companies could be many who make them. In the end, if you really really want to be away from all this kind of business, one should be a hermit.
Usage of animal products:
1. Plastic bags - Many plastics, including shopping bags, contain 'slip agents', which reduce the friction in the material. What are those made of? Animal fats
2. Car and Bike tires
3. Glue in wood work and musical instruments
4. Biofuels - nowadays animal products are used - beef or chicken biofuel
5. Fireworks
6. Fabric Softener
7. Shampoo and Conditioner
8. Toothpaste
9. White and Brown Sugar
10. Any kind of industry that produces leather goods..shoes, belts, wallets etc
11. It is not just few pharma you have listed...but animals are used for trials.
12. Perfume industry

And then there are industries/companies that are indirectly using products made from killing of animals..hotel industry selling meat products.

I will be really interested to know, which industry/company exists to be invested if you apply the 'ethics' filter. Like I said, if one wants to justify, then the definition of "ethics" can be tweaked to suit oneself.

Thanks,
Nagaraj