Time Technoplast Ltd (TIME IN): 1QFY20 – A Stable Outlook.

Dated – 16 August 2019

1QFY20 Results

• Time Technoplast Ltd (TIME) reported 11% YoY growth in consolidated revenues at Rs 8,684 Mn. The revenues in both the segments – Polymer products and Composite products increased by ~10.9% and ~11.5% YoY to Rs 6,158 Mn and Rs 2,523 Mn respectively. Share of Polymer Products in total revenue was 71% whereas share of Composite products was 29%. The Value-added products grew by 15% in Q1FY20
• The EBITDA increased by 4.9% YoY to Rs 1,267 mn and the EBITDA margin remained stable at 14.6%.  
• Segment EBIT margins for polymer Products and composite products were 10.1% and 9.8% respectively.
• Time reported PAT of Rs 438 Mn with YoY growth of ~1.15%.

Management Commentary

• 11% revenue growth was led by volume growth of ~14% YoY in 1QFY20.
• Pipe segment continuous to have a healthy order book. The pipes/ducts have substantial business potential especially in Smart cities.
• In industrial packaging segment, The Greenfield manufacturing facility at Bengaluru is completed and production started in Q1 of FY20.
• Time did a capex of Rs202 Mn on established products and Rs 102 Mn on Value added products in Q1FY20.
• Overall capacity utilization is 80% (India – 83%; Overseas – 74%).
• Ongoing tension between US and china can benefit company’s IBC business.
• Company is expecting a tax rate of 26% for FY20.

Consensus Estimate (Source: market screener website)

• The closing price of TIME was Rs 65/- as of 14-August-2019. It traded at 5.7x/5.2x consensus EPS for FY20E and FY21E is Rs 11.3 & Rs 12.5 respectively.
• Consensus target price of Rs 187/- implies a PE of 14.9x on FY21E EPS of Rs 12.5.

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