Time Technoplast Gets A 'Buy', As Systematix Initiates Coverage; Sees 56% Upside

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.We initiate coverage on Time Technoplast Ltd. with a Buy rating and a target price of Rs 615 (56% upside potential), based on 22 times FY27E price/earning. We are optimistic on its value-added composite products (LPG and CNG cascade cylinders), stable and long-standing industrial packaging (drums, jerry cans, IBC etc.) business, and focus on improving financials to turn debt free over the next two-three years. Time Technoplast is-a leader in India and among the top three players globally in industrial packaging and composite products, anda market leader and largest manufacturer of large size plastic drums globally, with an impressive 50-60% market share in India and high share in 10 countries present globally. .Post 17%/17%/28% CAGR in revenue/ Ebitda/PAT over FY22-24, we estimate 15%/17%/27% CAGR over FY24-27E, respectively, led by strong performance in its value-added products segment (20% revenue CAGR, 18%+ Ebitda margin). Despite annual capex of Rs 1.5-1.7 billion, we estimate pre-tax return on capital employed to expand from ~16% in FY24 to ~23% in FY27 on healthy operating performance, improved plant efficiency and lower net working capital cycle (by 10-15 days). We estimate annual operating free cash flow of Rs 4 billion+ over the next three years, which Time Technoplast will likely use to pare debt and achieve net cash status in FY27E (net debt of ~Rs 6 billion in FY24). We estimate healthy operating cash flow/Ebitda (60%+) and FCF/PAT (80%+) over the next three years. Management has also identified Rs 2.5-3 billion of non-core, non-performing assets that it intends to disinvest over FY25-FY26 (not in our estimates). It will likely use the proceeds to fund capex, reduce debt and reward shareholders. Any delay in order inflow of composite LPG cylinders and CNG cascades pose key risks to our estimates..Click on the attachment to read the full report:.Skipper - A High Voltage Story; ICICI Securities Initiates Coverage With A 'Buy' Rating.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Time Technoplast Gets A 'Buy', As Systematix Initiates Coverage; Sees 56% Upside

The brokerage believes higher value added product share to drive RoCE and cash flows.

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