Time Techno seems to have hit a purple patch in terms of delivery (17% sales growth, 49% EPS growth) and investor confidence. Its hard to believe that the co was available at 3x PE during COVID fall! Management now seems very confident of exceeding 15% growth in the medium term. Concall notes below.
FY24Q3
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Targeting 15%+ sales growth in next 2-3 years (10-12% packaging + 30% composite)
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Established product growth of 15% was driven by polyethylene pipe businesses (expect 25% growth in pipe business in next 2-years)
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9M debt reduced by 65 cr. and will reduction will exeed 100 cr. in FY24. Without any further divestment, debt will reduce to 450 cr. and interest cost will reduce to 50-60 cr.
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Capex : 45 cr. (23 cr. towards established products + 21 cr. towards value-added products). Reduces FY24 capex to 175 cr. (vs earlier planned 200 cr.)
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Middle east disinvestment : 50% business for $25 mn (13-14% EBITDA margin, ~350 cr. FY24 revenues; include Dubai, Bahrain and Saudi; excludes Egypt plant; out of 1.4mn IBC capacity in Middle East, divesting 0.1mn IBC capacity). Net of taxes, will get ~175 cr.
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Target divestment of 125 cr. of non-core assets (earlier 100 cr.) and no non-core assets by FY25. First transaction of 26.5 cr. will be used for debt reduction
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In IBC manufacturing, leader in 7 out of 10 countries. Are not leaders in US. Total capacity: 1.4mn abroad (60% utilization) + 0.5mn India (75% utilization). 60% IBC sales comes from overseas and 40% from Indi a
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In CNG cylinders, will target auto segment after next capex cycle in FY25
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CNG composites : capex of 125 cr. (capacity increase from 480 to 1,080) can generate revenue of 800-850 cr.
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Targeting 1500 cr. revenues from composite in next 3-years (vs 500 cr. in FY24)
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Oxygen cylinders: started registering process with army and navy authorities. Fungible capacity with LPG
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LPG Type-IV cylinders: Only Supreme and Time techno are making this (combined capacity of 2mn)
Disclosure: Invested (position size here, no transactions in last-30 days)