Exact location is prented in INVETOR presentation. you may look it. it 5-6 factory out side india. Insian business and out side indian business almost have same income with good profibality .
CNG price is increased and in line with oil price. But CNG covers will increased from present 3000 to 12000/- pump by 2030 and it is going to sustain. CNG and other infra business have 10000/-cr–ten thousnad cr business will come every year. TTPL now concetrating it.
Just LPG TYPE IV bottle demand is 70 million for all 4 PSUS. TTPL has 1 million capacity which willl incresed another 1 million by next year. See oppotunity size…
TTL’s future investments in value added products specifically composite cylinders is good capital allocation only if CNG cascade & onboard cylinder demand stays strong.
As price of CNG is coming close to petrol/diesel will impact conversion of vehicles to CNG and sell of new CNG vehicles, we should first know whether this CNG price hikes are sustainable or not. The price gap between CNG & petrol is crucial.
Need to see how much of Time Technoplast’s planned growth for next 3 years is based on CNG demand, especially CNG refilling stations and/or telecom towers.
While today’s high prices may not stay once the Ukraine conflict blows over, it might still delay widespread CNG availability/adoption.
Have anyone seen their product in market for CNG? Have seen Trucks in Delhi, are having metal cylinder but never seen the composite cylinder.
The Company has received approval from PESO last year only. The shift from metal cascades to Type-4 cylinders will be over a period of time.
I agree with your point that if the price of CNG comes close to petrol then this will definitely impact the conversion of vehicles to CNG.
But another important thing to keep in mind is the focus of the entire world on reducing carbon emissions opens ways for other available options. Transition to EVs will take time so until that time using CNG vehicles is more environment friendly as compared to using Petrol/ diesel vehicles. So there are chances that govt would announce favorable policies for CNG vehicles also.
Agreed to most of your points.
Now I’m seeing this as even if CNG cascade demand goes down, company can use newly created capacity for LPG/Oxygen composite cylinders.
Let’s see what management has in mind in coming con-call.
While the price of CNG has definitely increased, it is still significantly cheaper than Petrol. Also another important fact is the mileage derived from CNG vehicles - which is 50% higher than petrol vehicles. So price differential still remains substantial though reduced form the peak. This would be the new normal which people will have to live with.
It is not Musk’s Tesla. Yes I agree they should have clarified this.
Subsidiary company, Ned Energy(https://nedenergy.in/) got the contract for 100 crs. supply to Tesla Power USA Inc (Not Elon Musk’s tesla, This company has quite a bit of India presence)
Anyone knows the revenue contribution of Ned to Time?
|NED Energy (India) (cr.)||FY16||FY17||FY18||FY19||FY20||FY21|
|Amount invested by Time Technoplast||48.29||63.95||63.95||63.95||63.95||68.99|
This order being equivalent of current annual revenue, may help NED energy to swing into profits
I wanted to understand the reason for time technoplast decline from 2017 to 2020 ?..The profits seemed to hve been improving only, debt got a little high and cash conversion cycle also increased but nothing to lead to such a decline …seems promising but not invested yet.
There was case filed against the company for cheating by a UK based firm but then in 2020 the case was withdrawn.
Please check the article provided in this post.
- See their return ratios - esp ROCE.
- They have promised / forecasted a stronger revenue/ growth trajectory which didn’t happen.
Disc - recently invested
there were multiple reasons -
- Small cap mayhem
- Promotors shares pledged to buy real estate and they were planning to develop it( loss of focus on business)
- Court case
- Competition increased in packaging business(Margins contraction )
I made detailed notes in 2019 on that but not able to find now, these are some I remember
Impressive Q4 results by Time technoplast
- 20% revenue growth in FY22 vs FY21.
- About 90% increase in net profits FY22 vs FY21.
-Improved cash flow, Debt remains constant
- Yearly EPS - Rs. 8.31
@kalpesh4430 - If you would like to share your insights pls.
Result shows they were able to pass on raw material price inflation considerably good.
Sales growth looks great compared to FY21 but it was an unusual last year(low base effect) so we can see it as company reached pre-covid level only.
Value added products are in good demand and its revenue share can increase in the future.
Inventory and receivable have gone up, inventory rise may be due to delay in procuring pipes by EPC contractors and orders of composite cylinders
I don’t understand why their cost of debt is so high? they should focus and restructure this first.
In the past under the leadership of Mr Anil Jain company has made many bad capital allocations & diversification decisions such as buying a battery business, furniture business, pledge shares to buy and develop real estate land in personal capacity (loss of focus on company) etc,
Now with change is leadership let’s see how good or bad capital allocator Mr Bharat Vageria is.
They have taken shareholders voting on selling or divesting or restructuring of overseas business but they did not provide any details to shareholders before voting.
They should have provided detailed or at least brief plan of which businesses they are interested in selling or restructuring.
They are on the right track of focusing on working capital management, lets see if they could show this up in numbers.
Disc : Invested
Company came up with good set of numbers, business is back to pre-covid level. They are looking to partly divest their overseas assets and use the proceeds to invest in composite value-added business lines. Concall notes below
- Polymer prices have increased significantly which has been passed on with a time lag. This has impacted margins by 50-75 bps
- FY22 capex was 186 cr. (107 cr. for value added + 79 cr. for existing products)
- Divestment of overseas assets: Will finish divestment of majority holdings in overseas assets (includes all overseas assets including Shajah, USA, etc.) by FY23 end, have appointed 2 merchant bankers who are currently valuing these assets. Proceeds will be used for deleveraging and for capex in value added businesses (including hydrogen cylinders). Company is very bullish on hydrogen cylinders (maybe due to early mover advantage)
- Have been experiencing buoyant demand in Middle East and USA (part of it is because of China+1)
- Type-IV CNG cascade: Have started supplies to CGD companies. Water volume capacity is higher for Type-IV cylinders vs Type-I steel cascade because of lighter weight. So if a vehicle can transport 4500 L in Type-I then Type-IV allows carrying 9000 L (2x over Type-1). Cost of Type-IV is 3x of steel Type-I cascade. On a service life of 20 years, payback is 6 months to 1 year
- LPG capacity: 70% is already booked from current orders
- Have been slower on CNG expansion for on-board vehicles due to high debt levels, proceeds from overseas divestment will be utilized to grow on CNG. Also, in on-board applications on vehicles, OEMs require a long time before approval and company is currently working with the OEMs. This will take longer
- Indian business (~2’500 cr. in FY22) should grow by 20% and reach 3’000 cr. in FY23 along with expansion in EBITDA margins
- Targeting composite business of 1’000 cr. in next-3 years (with 750 cr. from CNG)
- Tesla battery order of 100 cr. will be executed in FY23. Battery segment can do 300 cr. at full utilization. Expect 60% utilization in FY23 (~180 cr. sales)
- Projecting 230 cr. sales in pipes business
- Expect working capital improvement by September 2022 (with higher contribution from value added and lower contribution from pipes)
- Targeting 19% ROCE in next-3 years (by FY25) with 35% contribution from value added products
- Fixed assets turns for composite cylinders is 2.5x
Disclosure: Invested (position size here, no transactions in last-30 days)