This is from Systematix. You can checkout some of the Tele gm groups for such reports.
Board meeting to discuss fundraising proposals.
Just remembered that sign of peak/bubble in a bull market is surfeit of IPOs and equity fund raising.
Thankfully, in this case it is purely equity and no debt component at all.
Will be interesting to hear management’s view on quantum of funds, how they intend to deploy it, timeframe & expected returns.
Was a bit surprised to see this earlier today.
They have cash. Not sure why they need to raise. Reasons better be clear and compelling. Which they surely would.
Raising equity for supporting strong growth in the value added products might not be a bad idea, however company should not overpay for acquisitions. I would have been more happy with divestitures first and not equity dilutions
It is a very smart move by company.
they have debt equity ratio of 0.3x and am sure can raise debt easily for expansion.
Who would not raise equity at such high valuation. Would any promoter dilute equity if debt is available for expansion? The only reason for doing this is high valuation - debt can always be raised later when valuations cool off.
similar companies with low debt equity but going for equity raise - Waaree, KPI Green, etc
Best thing right now is to wait for results. also what is the expected QIP price - it could be at discount to market price. and most important is if promoters are participating.
Understanding QIP, I came to know promoters can not participate in QIP, could you help me understand they can or can not, how will it impact the pricing?
major effect of QIP on stock price:
Just trying to understand the major effect of QIP on stock price, I came across following major points. Hope it will help other new investors as well:
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Dilution: Issuing new shares can dilute the value of existing shares, which might lead to a decrease in stock price.
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Market Perception: If the QIP is oversubscribed, it indicates strong investor confidence, which can positively impact the stock price.
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Use of Proceeds: The impact also depends on how the raised funds are used. If used for growth initiatives or debt reduction, it can lead to positive market sentiment and a rise in stock price.
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Discounted Pricing: If shares are issued at a discount, it might signal lower demand, potentially causing the stock price to fall.
feel free to add if any other major impacts are left.
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the Board of Directors of NED Energy Limited (“NED”) (“the Transferor Company” — Holding Company of PBBPL) and Power Build Batteries Private Limited (“PBBPL”) (“the Transferee Company” —the Wholly Owned Subsidiary of NED Energy Limited) at their meeting held on November 08, 2024, have considered and approved the Scheme of Amalgamation under the provisions of Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 (“Act”) and the rules made thereunder.
The battery portion of the company is too small (both revenue & profits) at the company’s consolidated scale.
In prev conf calls, mgmt was fully intent on selling it off or even let the division’s employees buy it out (my memory is slightly hazy here). Battery division divestment probably got pushed down as mgmt was concentrating on overseas divestment (which has dropped off now).
For now it looks like just consolidation of divisions doing similar work.
I haven’t seen anything in last 6 years of following the company that says the battery division has any great IP/product with potentially competitive scale that can make a difference to company’s fortunes.
You are probably right.
But my mind keeps connecting dots.
I won’t be surprised if the management alludes to this during the upcoming call. Maybe even announce some new developments.
Reserving my right to be wrong.
I was reading their annual report ( Fy 24) and while reading the they have paid 92 cr tax , but their actual tax from their P&L is 115 cr. Why this shortfall . I request the experts to help me please.
Disc: have very small position
The new management seems to have a fair understanding of buizz. With new QIP we may see some investment in capex and balance to repay debt. With valuation at which time technoplast trades and improving fundamentals and company moving to debt free bullish about re-rating of company.
Invested no trades recently.
Thankfully, while of lot of companies have given poor Q2 results, time technoplast seems to have kept its word and delivered another set of good numbers. YoY 15 and QoQ 10 percent consol revenue growth and almost 40 percent YoY PAT growth. March and September numbers seem similar since 2-3 years.
The UAE disinvestment seems off the table now. Will probably give more info in the concall
Time Technoplast -
Q2 FY 25 results and concall highlights -
Revenues - 1371 vs 1194 cr, up 15 pc ( volume growth @ 17 pc )
EBITDA - 197 vs 167 cr, up 18 pc ( margins @ 14.5 vs 14 pc )
PAT - 98 vs 70 cr, up 40 pc ( due reduction in interest and depreciation costs )
India : International revenue break up @ 66 : 34
Value added products reported a revenue growth of 21 pc vs 13 pc growth for established products
Product wise revenue break up -
Polymer products ( like - Drums, Jerry cans, Polyethylene pipes, turfs and mats, disposable bins, MOX films, steel drums ) - 63 pc, Segmental EBITDA margins @ 14 pc
Composite products (like Intermediate bulk containers, composite cylinders, Auto parts, energy storage devices) - 37 pc, Segmental EBITDA margins @ 15 pc
Out of the products listed above, the value added product segments include - Intermediate bulk containers ( IBCs ), Composite CNG,LPG cylinders and MOX films
Established products include - Drums, Jerry Cans, auto components, air and hydraulic tanks, their Lead - Acid batteries, door mats, PE pipes. Their batteries are used in Telecom sector, railway signalling and other Industrial applications
Established products revenues @ 980 cr, up 13 pc ( 72 pc of revenues ), Segmental EBITDA margins @ 13 pc
Value added product revenues @ 390 cr, up 21 pc ( 28 pc of revenues ), Segmental EBITDA margins @ 18 pc
Company’s board has approved raising 1000 cr via QIP for the following purposes -
Partial or full repayment of debt
Greenfield expansion projects for VAPs like IBCs, Composite LPG, CNG and Hydrogen cylinders
Brownfield expansion projects for Established packaging products
Working capital requirements and general corporate purposes
Company has earmarked non core assets worth Rs 60 cr for sale within next 12 months ( have already sold and realised Rs 65 cr in H1 )
Company is undertaking R&D to make fire extinguishers from composite materials. This will open up a huge mkt for them considering the light weight, easy to handle and longer shelf life advantages that come with composite materials
Company has decided not to proceed with 50 pc divestment of its stake in the UAE business ( most likely because of the QIP + better margin realisations from UAE operations in last 1 yr + the company is planning to put up an additional manufacturing plant in Sharjah )
Seeing strong demand for their CNG/LPG cylinders
Seeing good demand trends in India business post monsoons
In general H1 : H2 revenue split for the company is around 45:55. Similar trend should play out in the current FY as well
Company intends to hit VAP share of sales @ 35 pc in next 2-3 yrs from 28 pc currently
Capex in H1 @ 95 cr. Aprox 40 pc towards maintenance capex and the rest towards value added products. Should spend another 100 cr on Capex in H2
From the UAE facility ( which company was earlier planning to sell ) - company only makes their packaging products ie Jerry Cans, Drums and IBCs
Current capacity utilisation in India facilities is around 80 pc and 87 pc for international facilities
Breakup of company’s overseas business between ME, SE Asia, US stands @ 30 : 50 : 20. Confident of growing the total International business @ 15 pc kind of rates for foreseeable future
Another area of significant potential growth in composite ( light wt ) fuel tanks for drones used in Agri Sectors. These fuel tank enabled drones have 5 X flying endurance vs battery operated drones
The composite fire extinguisher that the company is developing shall weigh 20 pc of the metal fire extinguishers - currently in use. This is gonna be a huge improvement wrt being user friendly. Plus the composite cylinders will be rust/corrosion free. A lot of new Govt regulations are now mandating using composite fire extinguishers in critical areas - like Vande Bharat trains and other critical infra
The composite Hydrogen and CBG cylinders are another huge future business opportunity for the company
Company has a first mover + ahead of time by aprox 3 yrs in development cycle advantages - when it comes to composite material based storage systems
OEMs like Tata Motors have already approved company’s facilities for supply of composite CNG cylinders. As new capacities come up, supplies shall begin - maybe by late next yr
Current borrowing rates for the company are in the band of 8.25-8.5 pc
Disc : holding, biased, not SEBI registered, inclined to add more, not a buy / sell recommendation
Q2FY25:
• Value added products grew by 21% in Q2FY25 as compared to Q2FY24, while established products grew by 13%.
• Polymer products: Composite products = 63:37% of sales
• Value added products: 28% of sales with 18.3% EBITDA margins
• Total Debt reduced by Rs. 51cr from H1FY24
• order book- PE Pipes: 175cr. Composite Cylinders (CNG Cascades): 185cr
• Return on Capital Employed for H1FY25 = 17.0%
• New Manufacturing unit by TPL Plastech Ltd: In the Konkan region of Maharashtra, TPL Plastech Limited (75%), Subsidiary of the Company is setting up Greenfield manufacturing project for Industrial Packaging products i.e., Intermediate Bulk Containers (IBC), Plastic Drums & Jerry Cans. This unit will cater to the existing & growing Agro chemical and allied demand in addition to the emerging market arising due to setting up of new projects on Solar/PV Chemicals, fruit and juice industry, semi-conductor chemicals and Ethyl Natural Alcohol units. Other than offering the latest developments in Packaging, the Company will have cost advantage for servicing in surrounding areas considering the voluminous product. The Company has already received land allotment from the Government authorities on a long-term lease basis & estimating to complete this project in FY 2025-26.
• Update on Sale of Overseas Business (Middle East): The Board of Directors reviewed the status of the disinvestment process regarding the sale of a 50% stake in the UAE business to a financial investor. After thorough discussion, which included an evaluation of the current situation in the Middle East, the Company’s strategic goal of becoming debt-free through its growth plan (targeting around 15% p.a.) and the ongoing Qualified Institutional Placement (QIP) (as detailed in Note No. 1), the Board decided not to proceed with the sale of the business.
• The Company’s Board has approved the consolidation of its product portfolio and manufacturing units in India & overseas, including the addition of new locations, Brownfield expansion, to better align with market demand while optimizing costs.
• Management has identified non-core assets for disposal with a realization value of Rs. 125 Crores (approx.). As of September 2024, the Company has successfully realized Rs. 65 Crores, and efforts are ongoing to achieve the remaining Rs. 60 Crores within the next 12 months.
• Development of technologically advanced TBS (Transparent Container Batteries) and E-Rickshaw batteries in Lead Acid and Lithium, through subsidiary company (NED Energy Limited & Power Build Batteries Pvt. Ltd.) is under process at their existing units. TBS is a type of lead-acid battery commonly used in power segment for backup power systems and, other applications requiring reliable and long-lasting energy storage and projecting for launch in Q4FY25
• Dominant market position with over 55% market share in domestic Industrial packaging.
• Well established inhouse R&D team of around 30 people having experience of more than 15 years for upgrading existing and developing futuristic products by using latest processing technology
CONCALL NOTES:
• LPG CYLINDERS: Certain Indian government gas distribution companies need 14.5 kg cylinders which company is Currently developing. But it is going to take time. And further, in the present scenario, all the distributor meets of the government companies are ongoing so that the company can also understand the market size and take the necessary action to put the capacity in place. So, this is the advance we ourselves are keeping ready for that.
We will continue the 10 kg cylinder sales but the large volume means 50 lakhs, 60 lakhs cylinder order they have asked us to develop a cylinder of 14.5 kg. I mean, we and Supreme are involved together we are developing a cylinder of 14.5 kg now they will develop the tool, the drawing design has been submitted, this is not done immediate, it is a six-month project. The drawing, design will be approved. We’ll make the product, submit it, and get the money approved. But during that intervening period, the 10-kilogram project will continue
Secondly, I am glad to tell you that along with IOCL, IOCL has given us permission since March to do distributor meet. All their distributors will go to cities to meet distributors and create awareness. So, already, as of today, it’s been done in 14 cities. HPCL, BPCL has also allowed they have to give permission because we are meeting their customers and dealers. And we are creating awareness for their dealers and distributors in this city so that in future demand can be created. In six months, all over India, HPCL, BPCL, IOCL distributors will be met and awareness will be created about what are the advantages of Cylinder, because normally, what do people think? And this is a plastic cylinder and a metal cylinder. But the plastic cylinder is light, it is explosion proof, it has light weight, it has easy gas visibility. To explain all this, if we explain to the distributor, then the distributor will tell the dealer, the dealer will tell the consumer, then it will be used in mass media. Then it will be used slowly slowly.
• Company will achieve target to achieve the working capital cycle days of 85 to 90 days in the next two years’ time
• SAUDI EXPANSION: The company-management has decided to put their own plant in Saudi, which will be around 100% by subsidiary of Time Technoplast Ltd. Saudi has good demand with upcoming chemical zone areas. And t Saudi government is welcoming to expatriate, and they are giving good kind of benefits to the industry people. So, we thought it is better to put our own unit there in Saudi. Currently, we are servicing from our nearby countries, Bahrain and small units available in Saudi also. And this will be the 100% ownership.
• Overseas business will grow at 15% in the 2-3 years.
• The oil prices have gone down in the range of $70 to $75, which at one point of time, it was $85 to $90. So, it is good. When the polymer prices are down, companies take the strength and the benefit pass on to the customers. And it gives good conversion from metal to the polymer and composite product take place faster.
• And another thing, it is seen that in the last one year or next one year also, one or two years good new capacities of polymers are also coming. I am glad to tell you, anybody in the processing process industry, next three years, good for the polymer processing and composite product company, because the capacity and there is a demand gap between the demand and the supply. So, it means the buyers’ market, you can ask your discounts, whatever things you want, and the faster conversion will be there.
• DRONE APPLICATION OF COMPOSITE CYLINDERS: The government is focusing on using more drone by the agriculture use also, and for surveillance. So, currently, what I understand, most of the drone companies, I think 20-25 companies are in India, who just is engaged in manufacturing of the drone. And as I understand drone value, per drone value, ranging from Rs. 5,00,000 to Rs. 30,000,00. And many agriculturists now started using for the fertilizer, seed growing, the drone they are using. And currently they use the batteries. So, when they will use this cylinder, then they can go the fly on the high and further they can fly the more hours, four times capacity more than the present batteries they use it. So, the new application is coming and very soon you will hear application for the drone application of our products. I will update as we get the final approval for this very huge opportunity in that line of the business. Because internationally I understand it’s a $40 billion business as far as drones are concerned globally. But India has a good opportunity. So, we’ll see how we’ll grab that opportunity available.
• IMPORTED RAW MATERIAL SUBSTITUTION: We have certain understanding with the local manufacturers to develop this product in the next two years’ time. I don’t want to mention the name of the polymer manufacturer because they are the large company and the confidentiality agreement signed between us to develop that product.
• Reliance has declared Rs. 65,000 crore investment in compressed biogas plant in Andhra Pradesh. So, that is also where the composite cylinder can be used.
• So, we are projecting the composite business, cylinder business, can be of Rs. 2,200 crores yearly business it is possible in the next three years’ time, looking at the policy of this government.
So, we are also targeting, in the next five years’ time, this composite product, which is currently Rs. 350 crores can be reached to over Rs. 2,000 crores in the 5 years’ time and around Rs. 1,500 crores in the next 3 years’ time.
• COMPOSITE FIRE EXTINGUISHERS: Typically, the fire extinguishers are made of metal, and they are normally installed at a place and very rarely in use. Though the cylinder is, extinguishers are not used, they undergo a lot of corrosion and deterioration on the cylinder. And when the need comes in, you have to ensure that these cylinders are actually in working condition. On many, many places, they may observe that the cylinders are non-functional and they don’t even work because of the fact they continue to corrode. The advantage of the composite cylinders would be that they will not rust or corrode, and that’s a big advantage that we’ll have. In some of the new trains that have been rolled out by the Government of India, such as the Vande Bharat, etc., if you go through the documents there, in the tender documents, they have mandated the use of composite fire extinguishers in those new age trains. So, it’s a clear acknowledgement as well of the technology that is available and we are moving in that direction. The demand is enormous, there is no doubt about it.
• We will always have first-mover advantage in newer composite products in terms of experience and R&D.
• AUTOMOTIVE APPLICATION: Already gotten an approval from Tata Motors. Today, we have an approval for automobile industry for the size of 60 Liters. So, we have started working with them. We know that it’s an 8 to 12 months project when working with the automotive line. So, already my team have started working with them, getting the drawings, do the development because every vehicle’s capacity is different. Then we need to do the development of the tool for each and every model and each and every manufacturer. So, our team has started talking with them. And when expansion will come in the Q4 of this FY25, thereafter, we will take each of the OEM and supply them.
OEM, we are the Category-1 supplier. We are having a green channel with all OEMs because certain OEM products we have done, for example, Tata. We are already working diesel fuel tanks. We have worked out. And we are supplying from my Pantnagar factory. You know that Tata Magic and that vehicle, they are using that fuel tank of the gas, this diesel fuel tank. We are supplying. For composite product, air-receiver tank, we have worked for 30 liters with them. Now 20 liters under development. Certain composite products which are not of the commodity nature, especially we have a relationship with Tata, Ashok Leyland. So, we do some of the automatic components, which are not of the commodity, specific customized product, we already deal with them. So, in fact, people have started talking with them. We are in process of getting their design, drawing approvals, then we will do the development, submit them, then the PESO approval will be required. And when you go in automotive industry, then Automotive Research Institute, which is in Pune, their approval will also be required. So, we’ll do the right time so that all get the approvals, and we will introduce that in the automotive industries also. But there are many other things, many composite products. By using the same line, we can work out for the automotive industry.
• Asset turns for Capex – Value-added products: 3x. Normal products: 2-2.5x
• Whenever we do the automation re-engineering product, we consider the payback period and payback period should be less than four years whether by way of a reduction in the power cost, reducing the labor cost, etc.,
• POWER COST REDUCTIONS: We are working on power cost reductions also. As you know that the government is also focusing on the use of the solar power. Just a bulk figure, which I remember I would like to tell you. In a year in India, we used 15 crores units of the power. So, you know that certain government’s policies come out in Karnataka, Tamil Nadu, Maharashtra, Gujarat. You can buy up to 75% to 80% of your power requirement from the solar manufacturing companies. So, already, we have already signed an agreement. We have done the equity investment. And we are going to save almost Rs. 3 a unit. So, if I just remember, around Rs. 4 crore units which we have a requirement in Gujarat, Maharashtra, Tamil Nadu, and Karnataka we have signed. So, the company will be able to save next year at least Rs. 12 crores on account of the power, power cost itself. Because otherwise, my power cost itself is more than Rs. 110 crores something we are paying annually. Now, the similar policy we are expecting in the other states also, like in Telangana, in Uttarakhand, in Himachal, everywhere we are expecting, because one, our team is completely following the government Ministry Department and other local departments, wherever policy is coming, immediately we are tying up and try to save these costs because the major cost as far as power is concerned
• TPL PLASTECH EXPANSION: TPL Plastech is just expansion in the Konkan region because Time Technoplast does not manufacture IBC in the Maharashtra Konkan region. Currently, their customers are servicing from the Union Territory area, Daman and Silvassa, and Dahej area. So, too much logistic cost is involved. But especially in this Konkan area, too much chemical demand is coming up in Maharashtra government and many new units are coming up that region, which is already mentioned in note, you must have seen, see the solar, PV chemicals, fruit, juice industry, semiconductor, many new units are coming and because of the near to the Nhava Sheva port and the reason chemical zone is coming up. So, TPL Plastech exact investment will be worked out but roughly I can say it will be in value around Rs. 20 crores to Rs. 25 crores including the cost of the land and buildings and equipment and so that if company will do Rs. 25 crore investment then definitely it can generate the revenue of around Rs. 75 crores to Rs. 80 crores.
• Rate of interest: 8.25% to 9% in India. And in overseas it is in the range of 6% to 7%.
• OXYGEN CYLINDERS: Oxygen cylinder, yes, we have order. We were not executing it because we didn’t have a line. But we have executed something in this quarter. Already I had orders of 5000 oxygen cylinders. But supply is running. And as I said a while ago, we are going to get cylinder approval for Type3 drone application on this line which is a very, very huge market. But the hydrogen cylinder is Type-3. You will get news very soon about its approval. And we are going to supply for drone applications also. It’s all new, it is like that we are looking out, we are in composite product. In composite product, there is LPG, CNG, hydrogen, drone applications, air receiver tank, and in the automotive sector, there is more. Like there is fire extinguisher. We will use our knowledge of the composite product manufacturing and explore the possibilities in the industries where these items can be used.
• The point is straight. Where the iron needed is100 kg in an item, if the composite product works in 40 kg, then the weight reduces by 60%. The weight reduces by 60 percent, which increases the efficiency of the item. It becomes easy in handling.
THINGS TO TRACK:
• CNG CASCADE DEMAND: Will demand get hurt by recent developments regarding reduction in APM gas to CGD’s? Or will the trend of conversion of steel cylinders to composite cylinders continue? How will Supreme Industries entry into this segment play out?
• LPG PROGRESS WITH OTHER OEM’s
• PROGRESS OF NEWER PRODUCTS: Drone application, fire extinguishers, water heaters, oxygen cylinders.
• PROGRESS OF AUTOMOTIVE APPLICATION
• RAMP UP NEW CNG CYLINER CAPACITY
" We are pleased to announce that the Company has received an APPROVAL from the Nodal Agency, Petroleum and Explosives Safety Organization (PESO) for the manufacture and supply of HIGH- PRESSURE TYPE-3 FULLY WRAPPED FIBRE REINFORCED COMPOSITE CYLINDERS (6.8 Litres). These HIGH-PRESSURE CYLINDERS WILL FIND USAGE FOR STORING HYDROGEN TO POWER FUEL CELL DRIVEN UNMANNED AERIAL VEHICLES AND DRONE APPLICATIONS.
ThisisasignificantmilestonemakingTimeTechnoplastLtd.—theFIRSTCOMPANYININDIAtoreceive such an Approval for Manufacture of Type-3 Fully Wrapped Fibre Reinforced Composite Cylinders for Hydrogen Powered Fuel Cell, Unmanned Aerial Vehicles (UAV’S) & Drones. The Company is involved in developing additional sizes for the same application.
This confirms our unwavering commitment to “MAKE IN INDIA’ and advancing ‘sustainable green energy solutions, cementing our leadership in the growing Hydrogen Energy Sector. This follows our earlier announcement dated 20" June, 2024, when we were accorded APPROVAL OF HIGH PRESSURE TYPE-4 (NON-METALLIC) COMPOSITE CYLINDERS FOR CASCADE STORAGE AND TRANSPORTATION FOR HYDROGEN.
TYPE-3_ FULLY WRAPPED FIBRE REINFORCED COMPOSITE CYLINDERS FOR HYDROGEN POWERED UAV’S / DRONES:
The current technologies to power UAV’s & Drones are through conventional batteries which are rather heavy and only offer limited time and distance travel. Type-3 Composite Cylinders offers higher power to weight ratio being light weight and carries energy dense hydrogen. The reduced weight allows higher load carrying capacity, longer flying times and dispensing the need to charge very frequently. This has been made possible by using the cutting-edge materials with latest technology, making them highly efficient and eco friendly alternative to traditional powering sources.
Key Benefits of Hydrogen-Powered Drones e Higher power to weight ratio
e Extended Range & Flying Time.
e Lightweight & High Payload Capacity. e Eco-Friendly.
e Faster Refuelling or Recharge.
e Lower Operating Costs.
Application
Defence
Surveillance & Monitoring e =Agricultural application
Aerial photography
Search & Rescue
Cargo delivery
As UAV’s and Drones continue to play a pivotal role for the above applications, the demand for high performance, long range, environmentally friendly alternatives to conventional power sources have never been higher. The UAV and Drone market currently valued at approximately USD 30 Billion. With projected CAGR growth rate of 11% to reach USD 60 Billion by 2032 according to the publicly available market data.
The approval from PESO bolsters our position as a local manufacturer of high technology solutions for adoption of sustainable energy solutions within aerospace sector. We are excited to be at the forefront of this transformative change in India’s Drone Industry.
We extend our sincere gratitude to al our stakeholders for their continued support in helping us achieve this significant milestone. Together, we are driving progress, advancing sustainable technologies, and contributing to a greener future.
Source: https://www.bseindia.com/xml-data/corpfiling/AttachLive/afecce3e-71c1-49c3-8e59-c219a11f6bb5.pdf