Time technoplast

(Sarabjeet Singh) #22

It seems to have reached crucial support level. If it breaks further then next stop around 120–128.
It usually announces results around last week of May. So it has to hold the fort till then.

(Sarabjeet Singh) #23

Saw this news today

(Aditya Mehta) #24

This news was published on 24th April n on the next day i.e. 25th Time Tech went down by 5-6% n has been on continuos downfall from that very day.
Which shows that news has already been priced in.
Now coming to the article in HT the amount is too minuscule as compared to revenues.
14cr is only 0.46% of total turnover so material impact is almost nil but it will impact image of company.
The complainant is claiming that Time tech is not authorized to manufacture these cylinder which is totally false. N Time Tech will also be filing a counter complaint against Aburi.
I don’t think this event is going to affect financials of the company going ahead as it is already leader in some countries.
Lets see how it pans out.

(Sarabjeet Singh) #25

@Aditya942000 , how did u find this news buddy, it didnt appear in regular google searches with just company name.

I hope this news is priced in and could prevent further fall.

(Aditya Mehta) #26

Just need to google a little hard n everything will be infront of you :wink:
Yeah i feel so that it’s priced in n Moreover not to forget Q4 is their best quarter every year.

(Sarabjeet Singh) #27

Found this company had terminated the contract on 2nd April itself

Could this news be a non item and not impacting the current stock decline.

(Aditya Mehta) #28

Yeah it is available on their website it is non event.
But filing of complaint against the company with EOW Mumbai has impacted the stock price n that article was out on 24th April.
Material impact will be almost nil but what matters is legal action against the promoters.
Will have to wait for more clarity.

(Sarabjeet Singh) #29

Results date announced , its 24th May.
So till then I guess (hope) it would be range bound unless some exceptional news/event happens.

(Aditya Mehta) #30

Need to find out whether Aburi is also in litigation with other companies also or it is a false claim.

(Aditya Mehta) #31

Clarification From time technoplast.
TIMETECHNO_7468_reply.pdf (2.3 MB)

(ragsingh0305) #33

I think it is largely driven by crude oil prices (PE resins being their key raw material), other development, if any, I am unaware.

(Aditya Mehta) #34

No Sir crude prices do not impact polymer prices as they are now manufactured through gas route.
It’s about legal issues which is creating panic among investors.

(ragsingh0305) #35

true, polymers are also made from natural gas, but a good portion of total polymers uses crude oil as an input. Hence the prices of polymers are correlated with crude oil.

(Aditya Mehta) #36

But do you think raw material price increase will lead to such a brutal correction in stock price?
Afterall it is not a commodity based company.

(ragsingh0305) #37

I think it was much needed correction, it went on from 48 to around 200 in 2-3 years, although earnings did support the movement in price to a reasonable extent. Nevertheless, just like other small and micro cap stocks, there was some froth in the stock, and legal issues and raw material prices were the trigger that pull it down. In my view the price should stabilize at around this range with EV/EBITDA at around 8.0x at the current price, seems to be fairly valued. If the company continues to show 12%-15% growth as what it did in recent historical years, the share price will move upward.

(ragsingh0305) #38

Also yesterday, there was some pledging of shares by promoters, though it was marginal

Link: http://www.moneycontrol.com/stocks/reports/time-technoplast-disclosuretermsregulation-311312sebisubstantial-acquisitionsharestakeovers-regulations2011-11480741.html

(Aditya Mehta) #39

Your thesis might be right,agree that it was richly valued, not frothly though.
But as far as earnings support the stock could have commanded high multiple and should hv sustained it.
Can u confirm increase in raw material prices ( Polymers) through some source.
About legal issue with aburi m trying to find alot but there’s nothing out yet n also do not expect something too serious issue on that front.

Lets hope that stock stabilises here n fundamentals improve to support stock price.

(ragsingh0305) #40

yes…richly valued or frothy…i meant that it was 25%-30% overvalued. 60-65% of earnings still comes from commodity like products, and given the exposure to volatile raw material prices and limited ability to pass through cost to its customers…I think a multiple of 12-15 seems to be fairly valued.

(ragsingh0305) #41

Results announced post market hours…a good one and it has been doing it consistently in last 10-12 quarters (since i started tracking)

Based on 2018 actual financials, the current PE comes to about 16-17x while EV/EBITDA is around 7.5x. Some room for upside given these valuations, even if it can show 10%-15% growth in bottomline and cash flows.

(Sarabjeet Singh) #42

Such a consistent performer, excellent: