Time Technoplast Q3FY17 Concall Summary

Time Technoplast.png

Financial Highlights

Time Technoplast Q3FY17 Financial Performance.png
  • The key performance numbers are in Q3 FY 2017
  • The net sales on a consolidated level stood at Rs.670 Crores as compared to Rs.570 Crores in the corresponding period last year
  • EBITDA is at Rs.103 Crores as compared to Rs.85 Crores in Q3 last year and PAT at Rs.37 Crores as against Rs.28 Crores in the same period last year
  • Net sale is grown at 18% in value terms, the volume growth at 19%, EBITDA grew at 21% and the PAT went up by 31%
  • The net sale have been at Rs.1945 Crores as compared to Rs.1777 Crores, EBITDA is at Rs.293 Crores as compared to Rs.260 Crores last year and PAT at Rs.104 Crores as against Rs.86 Crores
  • In nine months period, the net sale has grown at 10% in value terms, in volume terms has 12% growth, EBITDA grew at 13% and the PAT grew at 21%
  • The net sales grew at 14%, in India sales grew at 11% and in overseas at 19%
  • The volume grew at around 15%, in India at 13% and overseas at 20% 
  • EBITDA grew by 16% and PAT grew at 23%
  • For Q3F17 the EBITDA margin improved by 45 basis points on year on year that would be – it is now at 15.30% as against 14.85% of sales
  • Finance cost reduced by 66 bps, which is at 3.29% as against 3.95% of sales
  • Net profit margin improved by 54 bps which is at 5.44% as compared to 4.90%
  • The net debt to EBITDA improved, is at 1.66 times of EBITDA as against 1.93 times of EBITDA in FY2016
  • ROCE improved by 136 bps y-o-y at 14.29% as against 12.93%
  • After 2007, company raised capital by Rs.150 Crores by the way of preferential issue of 16 Million shares to a specific investor in January 2017, which has been since been concluded successfully
  • EBITDA margin in overseas and Indian businesses are now almost the same
  • Net profit margins are higher in overseas businesses due to lower tax rate
  • The MOX Film operations have started only last week and received the product approved already
  • There is no capital commitment right now because company is using current capacity for the solar batteries, just a change of product and likewise for e-rickshaw
  • The EBITDA margin is 15% and 30% of business is coming from overseas
  • Witnessing EBITDA of about 18 or 20 Million US dollars which has been sold, is industrial packing company worldwide at EBITDA multiple of 10
  • In the beginning of the month, total debt is Rs.746 Crores and currently nine month, is in the range of Rs.725 Crores hence, paid nearly about Rs.20 Crores
  • For 700,000 cylinders revenue is Rs.150 Crores
  • Witnessing at the growth, company started in 1992 and are now at about Rs.2800 Crores
  • 15% EBITDA margin is not so bad that investor  would compromise on volume growth going forward
  • EBITDA margins have witnessed improvement by 0.44%
Overview.jpg

Key Operational Highlights

Time Technoplast Q3FY17 Ratios.png
  • In nine months, India and overseas are operations grew in value by 11% and 19% y-o-y
  •  The margins were about 17%, 18% and are projected to be in excess of 20%
  • Supplied cylinders to Reliance gas, which are in operation for more than three years successfully by the company
  • In addition to the Reliance Gas is now wanting to roll out LPG distribution in the entire country and chosen a few cities in Maharashtra, Gujarat and in some other places are planning to launch LPG in composite cylinders
  • The company has approval for composite cylinders in 48 countries and are exporting it to 25 countries
  • This year, the share of business for telecom battery is 50% and the balance 50% is other batteries namely solar batteries
  • Maintenance, the research and development would be looking at Rs.75 to Rs.85 Crores for FY 2018
  • Infrastructure is the pipes business which is the growth of almost about 30Company received corrugated pipes going up to 1600 mm in diameter which is especially for sewerage schemes, these pipes are to be buried deep inside the ground
  • The margins are very good and the product is a standard size of 1000 liters
  • The net working capital cycle days, which are ongoing 82 to 85 days, there is no any much gap is available as far in the current scenario
  • The Company will be increasing ROCE 2% every year and in 2020-2021, are looking at ROCE in excess of 21%, 22%
  • The internal target is ROCE should be minimum 10% higher than the lending weight in the market place
  • Witnessed the best growth in the pipe business in Q3, which is the demonetization time
  • The management was expecting the new development regulations to come in where by the floor space was to go up from 1 to 3.5 or 4 because that has been going on for quite a while
  • As far as the NCD is concerned, it is part of the plan to reduce interest cost and in due course, would be witnessing at other alternatives as well, which include NCD

Key Company Highlights

  • The company has tied up with the company in Indonesia and have a long-term contract with them
  • The company do not exposes to the Government and work with EPC contractors who take the water projects, for example L&T
  • The company is witnessing huge growth in the demand for the solar battery in which space have developed a battery, which is specially suited
  • They have developed a very specific battery for e-rickshaws .The e-rickshaws are growing very rapidly all over the country
  • The growth has been from composite cylinders on one side  and from PE pipes, which grown quite rapidly
  • The volume growth in this quarter of 19% volume growth was primarily industrial packaging which is a consolidated level more than 19%

Order book  

  • The company has an order book in excess of 1.8 Million cylinders , with staggered deliveries which is incumbent to increase the capacity
  • The order book is spread across many years - some of the orders will be going up to three years, but some can actually be in two years time

Capacity utilisation and Capex

  • The company have increased capacity for PE pipes from 18000 tonnes to 30000 tonnes
  • The capacity utilization stands at 87% in India and 67% overseas
  • The Company successfully completed the project for multi-layer multi-axial oriented cross-laminated film, which is called a MOX Film and this unit has now gone into operation
  • The product has already been approved as per BIS in fact and exceed their specification which are on the way to get the BIS
  • The companyhas also completed Brownfield expansion in Egypt for manufacturing IBCs which is 1,000 liter intermediate bulk containers
  • The company has enhanced production capacity for composite cylinder from 700,000 cylinders to 1.4 Million cylinders which will become operational in Q1 of the next financial year
  • It has a capacity of 700,000 cylinders now, this year will end up doing 350,000 cylinders at the end of the year
  • The capacity utilization in H2 which was about 65% to 70% since the capacity build up takes times
  • Every single IBC in country cannot have a capacity utilization more than 35% or 40% whereas in drums, capacity utilization could be as high as 80% or 85% and when combined it together, it comes down to 65% 
  • The capacity utilization islow overseas. The capacity overseas includes the capacity of IBCs and in most countries where company have received IBC, gone for the minimum economic size of 100000 IBCs a year, but that market is not more than 35000

Guidance

  • Expecting 20% growth in the next year
  • The value growth will be about 15% and may be the volume growth could be a little more than the value growth
  • This year have planned going up to 2020-2021 and as per the plan, are witnessing at a growth of 15% every year going up to 2020-2021
  • The company has not factored in any revenue in the current financial year but with the capacity of 6,000 tonnes, can expect a total turnover of about Rs.200 Crores from the operations
  • The EBITDA margin in the product is expected to be in excess of 20%
  • The tax rate will be in the range of 25% this financial year
  • The EBITDA would be in the range of 15% and already have reached that level which will be between 15% and 15.5% 
  • A growth overseas like 19% this year, next year it will be in excess of 19% 

Downloads