Time technoplast

5 Likes

The Time Technoplast management commentary was extremely positive. The management is very confident about their products and their sales and profits including their margins are to grow at a rapid pace in the next 2 years as new capacity comes on stream and they get into Tyoe4 composite CNG cylinders for cars and they will slsonbe getting into Hydrogen cylinders also. The potential is huge. In the case of their Comosite LPG gas cylinders the company said that the annual replacement demand from the OMCs for the old steel gas cylinders is 10 times the combined installed capacity of both Time Technoplast and Supre Industries put together. So demand for their products is really huge, they just need to keep expanding and make ore and more profits

3 Likes

Summary of Concall Q3 FY 24:

*Growth Guidance *
~15-17% growth for the next 3 years (Composite 30%, Established 10-12%.)

*Composite Guidance *
~500 Cr current year, 800 Cr next year & 1500 cr 2 year down the line.
~ CNG cascade capacity to expand from 480 to 1080 nos by next year, can give 850 cr revenue after expansion

*Valu added *
~Right now-26%
~Will increase 3-4% per year.
~Can become 36% in 3 year down the line ( Ebitda margin can go to 16% by then)

*ROCE *
~Nine Month ROCE is 15.6% against 13.6% in FY 23.
~ To improve by 2% every year.
~ Can become 20% three year down the line.

*Capex *
~ Nine month Capex 144Cr (63 Maintenance, 81 Composite & IBC)
~Full year Capex to be 175 Cr ( Reduced from 200 Cr)

*Restructuring *
~ Approved- 50% disinvestment of Middle Asea for 25 million $ ( 200 Crore), to be completed in 90 days.
~ Middle Asea contributes 7.5 % (Around 350 Cr) of total consolidated revenue.
~ As 2023 numbers are better than 2022, they may do re-exercise by taking 2023 numbers for balance disinvestment of USA, South Asea.
~No desperation for selling, will sell only when they get good value.

*Non Core Asset *
~ 125 Cr NCA to become Zero by March’25.
~Sell of 26.5 Cr land & building in South region to be completed in 90 days.
~ Proceed to be used for Debt reduction.

*Debt *
~ Target to become Debt free in next 3 year
~ By March’25 debt to be reduced to 450 cr from current 800, interest cost can go down to 60-70 from current 100.

*Entry into Automobile *
~No capacity right now, may consider it after next year’s capacity expansion

*Working Capital *
~Targeting to reach 90 days in 6 months, against 112 days last year.

*Disc *- Invested & Biased

22 Likes

Does anyone know company’s order-dispatch cycle?
In Q3 FY24 presentation, it has been mentioned company has an order book of ~400 Crs which at current run rate is less than one month of orders.
How does one evaluate if pending order book is good enough?

3 Likes

I don’t know if I am interpreting this correctly but…

Besides selling only 50 % instead of the earlier announced 80, and retaining management control Mr. Vageria now says this situation will remain for 3 years at least and then “We’ll see…”. The buyer is referred to as “investor” meaning one having only financial interest and not strategic. Mr. Vageria dwells at length on increasing potential in the region. Even with other overseas territories, Mr. Vageria has said (elsewhere) he is 'not desperate to sell’. Overall, the language seems to indicate they will go slow on the overseas divestment plans, do it selectively while retaining management control and consolidating the numbers into TTL. If I remember correctly, earlier the stated intent was to sell 80 % and focus on “core business in India”, implying forget overseas. That may no longer be the case now.

Any views?

8 Likes

Overall the management is not consistent. I have seen previously they used to over promise and under deliver. In my thesis, I keep that in mind. Invested from 75 levels. I think they have a good product opportunity but are not encashing it fullly.

2 Likes

The recent management to me seem to have good intention for shareholder value creation and not like Anil Jain where they achieved every target in terms of number of what they said and as far as sale for foreign business is concerned they were able to sell in line with what bharat ji told i.e., geography wise and from my recent channel check i was able to identify that big growth opportunities in terms of industrial packing is available in middle east and also big development is happening there esp. in Saudi so if they retain 50% stake in it is a good point.
but recently confidence petroleum also announced that they would be undertaking capacity installation for type 4 CNG cylinders and they have a plan to add 500 CNG stations by 2025 so how we should see this in terms of value creation?
who has better probability of it because both have similar margins in range of 14-15% while time techno has LPG cylinder capacity of 1.4 million and 1080 cascade CNG will be onboard from this year end

can anyone help me with it?

6 Likes

I have zero confidence in confidence petroleum it is another management that promised big but under-deliver. I agree that the current management of time techno is better focused on execution than the previous. At least there is effort to reduce debt

1 Like

15 Likes