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Systematix Research Report
On robust outlook and attractive valuation, we maintain Buy rating with an unchanged target price of Rs 615 (22 times FY27E price/earnings).
Time Technoplast Ltd. recently became the first company in India to receive approval from the Petroleum and Explosives Safety Organization for manufacturing of Type-3 Fully Wrapped Fibre Reinforced Composite Cylinders for Hydrogen Powered Fuel Cell, Unmanned Aerial Vehicles and drones. The UAV and Drone market, currently valued at ~$30 billion, is expected to grow at 11% CAGR to reach $60 billion by 2032.
On June 20, 2024, Time Technoplast received approval for the high pressure Type-4 composite cylinders for cascade storage and transportation for Hydrogen. While LPG and CNG composite cylinders are well established, Time Technoplast constantly evaluates the applications of composite products across industries that could generate immense revenue for it (sees Hydrogen and Fire extinguisher applications as big opportunities).
With these, Time Technoplast aims 35% VAP revenue mix in three years (FY24: ~25%) and consolidated Ebitda margin of ~15% (FY24: ~14%). A planned Rs 10 billion QIP will be used to fuel growth and to strengthen the balance sheet.
We expect 15%/16%/27% CAGR in revenue/Ebitda/PAT over FY24- 27E with pre-tax RoCE of ~23% in FY27 (FY24: ~16%) and a net-debt free status.
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