Equity Analysis

Presented by- Nilima Patil Santosh Phad

Vaishali Chinchore Harshada Patil

Snehal Vibhandik Nilesh Sandhanshiv

About Time Technoplast Ltd;

Time was Incorporated in the year 1989, started its operations as a small scale unit in Daman in 1991.

Mr. Anil Jain, Promoter and M.D of TTL.

It started its production with the manufacture of polymer drums.

But now has a diverse product portfolio by continuously adding newer products.

It currently boasts of 46 Manufacturing facilities across 13 countries like India, the Czech Republic, Poland, UAE, China and etc.

Product offered by TTL is under five broad segments- Industrial packaging, Infrastructure products, Automotive products, Lifestyle and Healthcare products.

Industrial Packaging:

Auto component:

Healthcare:

Lifestyle:

Infrastructure:

Economic Analysis Of

Plastic Industry

• GDP rate 5%

• Inflation rate 1.69%

• Well positioned in Industrial packing to benefit domestic end-user- 60% market share

•Expected revenue to grow 18%.

• Operating margins to remain stable

• Has established footprints in Asia

•ROE under stress in short term

•Total foreign exchange earnings-

Rs. 275.30 Mn

•Total foreign exchange outgo-

Rs. 2507.68 Mn

REVENUE CONTRIBUTIONS ARE AS FOLLOWS-

ECONOMIC ANALYSIS OF TIME TECHNOPLAST

Industrial packaging

Infrastructure product

Lifestyle product

62% 18% 20%

Cont.…

Strong growth in end user industries including

FMCG, chemicals, pharmaceuticals etc.Market leader in India with 70% market share.With 60-65% of its revenue from industrial packaging,

Time continues to be the leader in the domestic market.Time’s EBITD margin declined by ~2.6% y-o-y in FY12

to 16.2% due to (a) low capacity utilization levels of the international facilities, and (b) forex loss of Rs 130 mn due to unhedged foreign exchange payables.

Cont.…..

EBITD margin to stay low...

FY08- 21.5%

FY09- 19.9%

FY10- 19.5%

FY11 -18.8%

FY12 - 16.2%

Industry Analysis

Size of the Plastic Industry

In India there are about 25000 plastic processing units and about 250 plastic processing machinery manufactures.

The Machinery units supply over 2500 machineries per annum.

Role of Plastic Industry in the Indian Economy

2010

Consumption of Plastic polymer 6.7 Million Tonnes

Employment in Plastic Industry 4 Millions

Plastic Industry’s Turnover Rs 50,ooo Crores

Export of Plastic Products US$ 2500 Millions

Contribution of Polymers and Plastic Products to the Exchequer

Rs. 7000Crores

Source : Indian Plastics Industry

Polymer products/Industry

India’s per capita consumption of polymer is one of the lowest in the world at nearly 6kgs compared to Asia’s per capita consumption of nearly 18kgs.

United States per capita consumption is nearly 28kgs.

As India’s economy is growing at a rapid pace, the industry has ample opportunities to tap increased consumption levels.

Packaging Industry:

Indian packaging industry is currently a US$14 billion market growing at 15% p.a.

Industry is expected to double gradually in the coming years.

Infrastructure:

Development of numerous residential, commercial & industrial project and vital infrastructures has boosted the demand for primary raw material viz. Cement, steel etc. as well as facilitating material & equipment viz. glass, plastics.

In the next five years, Government of India( GOI) estimates investments to step up to $90 billion in the infrastructure sector.

Automobile Sector:

Indian Automobile component industry valued above US$ 20 bn in terms of turnover.

Automobile sector which is currently growing at 30% is also expected to continue the growth momentum.

Composition of Indian Auto Component Industry

40%

23%

12%

7%

8%

10%

Sales

Engine Parts

Others

Suspension & Broking Parts

Equipment

Electrical Parts

Drive Trans-mission

Source: Crisil Research

Health Care:

The Indian Healthcare Industry (i.e. health care delivery, pharmaceuticals, medical and diagnostic equipment) is estimated to be above US$ 40.2 bn in terms of revenue of which above 10% is accounted for by medical consumables viz. syringes, gloves, face masks and other disposable items.

Source: E & Y Survey

Competitors of TTL:

Product/Segment

Industrial Packaging

Infrastructure

Products

Lifestyle Products

Automotive Component

s and others

Key Competitors

Domestic: Balmer Lawrie, Van Leer, Sintex Industries.

International: Grief, Shutz and Mauser

Pipes: Jain Irrigation, Supreme Industries

Battery: HBL Power, Amara Raja, Exide Industries.

Highly fragmented industry with many unorganized players

Highly fragmented industry with many unorganized players

Peer Comparison:

P/E EBITDA ROE(%)

Company M Cap

FY 12

FY13E

FY 12 FY13E

FY12 FY13E

Time Technoplast Ltd.

9,140 10.2 8.4 6.8 6.0 12.2 13.1

Sintex Industries Ltd.

16,762 7.6 5.1 6.0 5.2 12.15 11.95

Supreme Industries Ltd.

31,852 13.2 11.7 7.5 6.9 38.8 34.8

Company Analysis

To understanding the internal working of the company and its relationship to its external environment.

Company’s Analysis can be done in - Financial Analysis - Non Financial Analysis

Ratio Analysis of TTL

Profitability Ratios:Gross Profit Ratio

FY08 FY09 FY10 FY11 FY1213.5

14

14.5

15

15.5

16

16.5

17

17.5

GP Ratio

Net Profit Ratio:

FY08 FY09 FY10 FY11 FY120

2

4

6

8

10

12

14

16

NP Ratio

Leverage Ratio: Debt Equity Ratio

FY08 FY09 FY10 FY11 FY120

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Total Debt-Equity Ratio

Asset Management Ratio:Fixed Assets Turnover Ratio

FY08 FY09 FY10 FY11 FY120

0.20.40.60.8

11.21.41.61.8

2

Fixed Asset Turnover Ratio

Liquidity Ratio: Current Ratio

FY08 FY09 FY10 FY11 FY120

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Current Ratio

Quick Ratio:

FY08 FY09 FY10 FY11 FY120

0.5

1

1.5

2

2.5

3

Quick Ratio

Market Based Ratio: Earning per share

FY08 FY09 FY10 FY11 FY120

5

10

15

20

25

30Earning Per Share

FY08 FY09 FY10 FY11 FY120.1

0.105

0.11

0.115

0.12

0.125

0.13

0.135

Dividend Payout Ratio

Dividend Payout Ratio

Profit and Loss A/c Statements

Particulars

FY’ 2011 FY’ 2012 Shift%

Net Sales 12,775 15,321 19.92%

EBITDA 2,383 2,470 3.65%

Profit Before Tax

1,525 1,229 -19.41%

Profit After Tax 1,169 921 -21.21%

Minority Interest

59 23 -61.02%

Net Profit 1,110 898 -19.10%

SWOT ANALYSIS

Strengths:

Unique business model

Association with Mauser

Wide Range of product Solutions: Reputation of “ ONE STOP SHOP”

Weaknesses:

Bulk of revenues come from packaging: The IP division currently contributes above 65% of TTL’s revenue and the emergence of a cost- competitive substitute product could impact revenues and profits.

Profitability of International Operations

Opportunities:

Spiraling Price of metal

Bright prospects of end- user segments: Sectors like telecom, chemicals, automobiles

etc. Demand for a product like batteries, high volume polymer containers, fuel/radiator tanks etc.

Threats:

Entire Manufacturing capacity is polymer based.

Elongation of working capital cycle: TTL enhances its scale of operations, the

scope and duration of working capital will go up. Strains the company’s resource and leads to drop in profitability of operations.

TECHNICAL ANALYSIS

Content

Line Chart of Time Technoplast.

Analysis with the help of Technical Indicator.

Average Volatility of Time Technoplast.

Share Price Movement of Technoplast.

Conclusion & Prediction of Technoplast Share

Prices.

One Month Chart for Time Technoplast Limited

Average Volatility of Time Technoplast Ltd

Date Closing Prices Returns St. Dev02-Sep-13 29.45 0.02207130703-Sep-13 30.1 0.02159468404-Sep-13 30.75 0.00975609805-Sep-13 31.05 -0.01288244806-Sep-13 30.65 0.02120717810-Sep-13 31.3 0.006389776 0.0136486 6 days 21.66646 21.67% for 6 days11-Sep-13 31.5 0.00952381 0.0125994 20.00088812-Sep-13 31.8 -0.012578616 0.0135956 21.58229913-Sep-13 31.4 -0.042993631 0.0227608 36.13166316-Sep-13 30.05 -0.023294509 0.0238333 37.83418417-Sep-13 29.35 0.005110733 0.0207332 32.9129918-Sep-13 29.5 0.006779661 0.020794 33.00952419-Sep-13 29.7 0.121212121 0.0580061 92.08177120-Sep-13 33.3 -0.042042042 0.0613528 97.39448123-Sep-13 31.9 0.001567398 0.0570542 90.57071124-Sep-13 31.95 -0.026604069 0.057473 91.23549225-Sep-13 31.1 0.011254019 0.0574016 91.12229426-Sep-13 31.45 0.046104928 0.0589079 93.51339627-Sep-13 32.9 -0.007598784 0.0307826 48.86583430-Sep-13 32.65 0.004594181 0.0240755 38.21864401-Oct-13 32.8 -1 0.4112162 652.78556

Volatility in %

Share Price Movement of Technoplast Ltd

Date Price High Price Low Price Close Price No. of Trade Turnover in Lakh25-Oct-13 34.9 34.9 32.6 33.45 332 3.7124-Oct-13 34.45 35 33.3 33.5 146 2.5223-Oct-13 35.25 35.5 33.55 33.7 124 3.8522-Oct-13 32.6 34.9 32.6 34.15 254 176.6321-Oct-13 33.8 34.25 32.25 33.75 249 168.2218-Oct-13 33.7 34 32.75 33.3 199 2.8517-Oct-13 35.2 35.2 32.25 33 634 8.7215-Oct-13 35.2 35.2 34.5 34.7 80 0.8714-Oct-13 34.55 35.1 33.5 35 169 6.3411-Oct-13 34.3 34.85 34.05 34.55 287 7.8210-Oct-13 34 34.3 33.1 33.95 315 13.1709-Oct-13 32.4 33.25 32.05 32.9 102 2.6508-Oct-13 32.95 33.75 32.1 32.25 223 2.8707-Oct-13 33.8 33.8 31.65 32.2 230 3.9404-Oct-13 33.9 33.9 31.65 32.25 172 2.9403-Oct-13 33.9 33.9 32.15 32.7 147 2.8101-Oct-13 33.9 33.9 32 32.7 175 3.2530-Sep-13 32.9 35 32.5 32.75 355 7.6927-Sep-13 31.95 34 30.1 32.65 337 4.5226-Sep-13 31.9 31.9 30.2 31.25 123 0.83

Conclusion:

Over the past 3 years, Time has aggressively expanded in 10 countries and has set up manufacturing facilities for its industrial packaging products in these regions.

Time’s management is well focused; gives due attention to innovate new products.

Domestic packaging revenue is expecting to grow above 16% CAGR in the next two years driven by strong end-user demand.

We suggest that, TTL is a good company to invest in. It will give good returns in the future and those who want to sell it hold the share.

Thank you.......