Anil Jain, Managing Director and Bharat Vageria - Director (Finance) of the company addressed the call.

Highlights of the call 

Time Techno has emerged as a formidable player in the polymer space, with a product repertoire that caters to diverse segments like Industrial Packaging, Infrastructure, Lifestyle, Healthcare, Composites and Auto Components related products.

It focuses on replacing metals with polymers in high performance areas using innovation and latest technology.

Time Techno services wide spectrum of user industry in each of its business verticals, reducing sectorial risks and tapping new opportunities for growth.

It has presence in India, Thailand, Taiwan, Indonesia, Vietnam, Malaysia, UAE, Bahrain, Saudi Arabia & Egypt. 

For the quarter ended March 2019, it registered a 15% rise in consolidated sales to Rs 1082.06 crore. OPM improved 20 bps to 15.7%, which saw OP rise 16% to Rs 169.61 crore. Net profit went up 33% to Rs 73.67 crore.

In FY 2019, it registered a 15% rise in consolidated sales to Rs 3563.74 crore. OPM fell 60 bps to 14.7% which saw OP rise 11% to Rs 523.50 crore. Net profit went up 12% to Rs 202.73 crore.

Revenues from value added products grew 20% in FY19. The share of value added products stood at 19% of the total sales in FY19 as against 18% in FY18.

The company's focus remains to increase the share of value added products in its revenue.

The company has revised its depreciation policy. Earlier the policy was aggressive. This is the reason why depreciation was down.

In FY 2019 sales in India grew 15% while that of overseas grew 14%.

Overall volume grew 15% in FY 2019. Volume in both India and overseas grew 15%.

India accounted or 71% of sales and overseas accounted for 29%.

Effective tax rate stood at 26.1%. Tax rate in India was 28.74% while in overseas business it was 18.96%.

Overall capacity utilization stood at 82%. India capacity utilization stood at 85% and overseas capacity utilization stood at 76%.

Total capex in FY19 stood at Rs 229.7 crore.

Capex for established Products for capacity expansion, re-engineering and automation stood at Rs 171.3 crore.

Capex for value added products stood at Rs 58.4 crore.

During the FY the company:

Completed Greenfield manufacturing project for manufacturing of IBC Bottle in Chicago, USA and commenced commercials sales which received overwhelming response

Project of Greenfield manufacturing facility at Malur near Bengaluru, India for manufacturing of packaging product is completed and production started in Q1 of 2019.

Launched new range of next Generation Matting products i.e Duro Gel and Duro Comfort and is receiving encouraging response.

PE Pipe business saw healthy order book of Rs 400 crore.

The company has started supplying newly launched new generation multilayer PE pipes for power / communication cable duct with silicon in-lining. The pipes/ducts have substantial business potential specially in Smart Cities.

Industrial Packaging saw brownfield expansion in India and overseas locations for future growth and leveraging of existing infrastructures.

The company innovated new applications of the MOX films.

MOX films launched new products in the market like Truck covers, Pond Liners, Mulching Film & Poly house Films.

MOX Films is focusing on new export markets i.e. Thailand, Malaysia, Germany, UK & USA.

Cash profit grew by 10%.

Total Debt in FY19 stood at Rs 839.9 crore.

In Q2 raw material and fuel cost saw steep increase which the company struggled to pass on initially but did it successfully as time went.

Target is to take RoCE by 2021 to 21%.

Capex for FY 2020 will be Rs 200-220 crore. This is the average of last 3 years unless there is some compelling reason to invest in some bigger projects.

Towards the end of the year it will have to review its capacity for composite cylinders as the order book is very healthy.

Composite cylinder grew by 20% to Rs 182 crore (835000 cylinders). It has capcity of 1.4 million which is a name plate capacity. Actual capacity will be 1 milion.

MOX films business is doing pretty fine. With the existing capacity MOX films can do business of Rs 200 crore. This is also a name plate capacity, actual capacity will be less. It did business of Rs 111 crore in FY 2019.

IBC grew by 15% to Rs 373 crore. It can continue to grow at 5%.

Value added business should grow in excess of 20% like in FY 2019.

It saw strong growth in pipe business and the receivables from the pipe business was extended due to the election.

Tax rate in Indian business is 28% against 18% overseas.

Raw material situation has improved because of overcapacity available all over the world.

The management is very optimistic for FY 2020. It is excited about its PE Pipe business as the PM is planning to supply drinking water to every house. PM also plans to have better irrigation to double income of farmers. The company supplies pipes for both agriculture and drinking purposes.

Pipe business capacity utilization is 82% and it might have to increase the capacity looking at the prospects.

MOX films can grow at 15% in FY 2020.

Pipe business has 12% ebitda margins and pipe business is growing very strongly. Thus there is pressure on company level margins.

Sales growth target for FY 2020 is 15%.

EBITDA margin target is 15% but again it can be less due to fast growing PE pipe business which has EBITDA margins of 12%.

The company is ready with CNG cylinders with different capacities. It is looking to tie up with various auto companies.

Order for composite cylinders is for 300000 cylinders in India for FY 2020. For overseas also it has good order book.

Current steel cylinder usage in India is around 360 million.

Debt at any point of time will not be more than 2x EBITDA. Now it is at 1.4x. However if there is need to increase capacity due to good orders it will review if it will allow debt to exceed the target of 2x ebitda.

If it does not meet the guidance of RoCE of 21% in FY 2021 it will not be because it didn't tried.