Time Technoplast Limited Q3 FY22 Earnings Conference Call Insights

Key highlights from Time Technoplast Limited (TIMETECHNO) Q3 FY22 Earnings Concall

Q&A Highlights:

• Sandeep Khanna from Emerge Capital asked about CNG products and LPG cylinders that the order received for 1.5 million cylinders, if it’s on a cash-and-carry basis. Bharat Vageria MD answered that it’s cash and carry basis. But the minimum time which is required in procurement of the material is that most of the components and inputs, that is required for these products are imported one. So inventory will have to be carried.

• Sandeep Khanna from Emerge Capital also asked about the capex plan. Bharat Vageria MD replied that as far as company is concerned, it has clear policy that debt should not increase more than 2 times of the EBITDA. So TIMETECHNO has worked out capex plan within that range only.

• Deepak Poddar of Sapphire Capital asked about topline growth for the next 2 to 3 years given the kind of traction seen on the cylinder side. Bharat Vageria MD answered that until 2025, the company has made internal plan on how the company can go further from INR3,600 crore to INR5,000 crore business in 2025. So that is possible by including the composite products and achieving a growth of more than 15% every year.

• Deepak Poddar of Sapphire Capital also asked about the margin targets. Bharat Vageria MD replied that the company has two types of products; established and value added products. Established product margins are in the range of 11-14%. The value-added product margins are in the range of 18-22%, but sustainable will be in the range of around 19-20%. Therefore, TIMETECHNO is expecting the reasonable EBITDA margin in the range of 14.5-15.5%.

• Deepak Poddar from Sapphire Capital enquired about the share of value-added products TIMETECHNO is targeting over the next three years. Bharat Vageria MD answered that by 2025, the company is targeting a value-added product business to reach around 32%. Currently it is 22%.

• Hemal asked about the gross debt at the end of 3Q22. Bharat Vageria MD replied that gross debt is INR837 crores and net is INR740 crores. Therefore, same as last quarter, no major changes.

• Suresh asked about the update on the US business. Bharat Vageria MD replied that the company is expecting good growth in the US business since the economy is growing fast. The company expects 100% growth from overseas business this year because all plants are operational with good capacity and good demand.

• Nilesh Shah from Arrow Investments asked about the update on the vision of divesting of non-core businesses. Bharat Vageria MD said that for the INR60 crores noncore asset plan, it does not include the battery business. And apart from the battery business, INR60 crores is inclusive of land building, furniture molds, fixes and furniture etc. In the next 6 months’ time, TIMETECHNO believes something can be heard about divesting of noncore business.

• Nilesh Shah from Arrow Investments asked if the company has any continuing orders from Tesla for batteries. Bharat Vageria MD said that the company is developing with them some kind lithium ion batteries for the solar sector. TIMETECHNO is assuring that the business is going to be enhanced with TESLA from April 2022 onwards.

• Nilesh Shah from Arrow Investments also asked about any visibility on the CNG Type 4 cylinder order potential in the next one year. Raghupathy Thyagarajan Wholetime Director replied that it’s a long cycle of development, which takes about 2-3 years of development time frame. Samples have been submitted, trials are going on. But it’s early to talk about the order.