TCPL packaging fell today while the entire market picked up. I think this is a counter intuitive trend. The Guwahati capacity is already in play and as capacity utilization increases, the overall margins will go up. This is because, the Guwahati factory is already running and incurring the fixed costs of rent, electricity, salaries etc. Any incremental capacity utilization will directly result in the total margin being added to the bottom line.
Moreover, it shows a lot of business strength to be capacity constrained in a market which is marked by over capacity. Being from the FMCG line and having dealt with them earlier, I see a much brighter future for them.
Anuj
Discl: Invested and accumulating
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