Capitaline

Analyst Meet / AGM 15-Feb-21

Conference Call

Time Technoplast

Expects FY21 revenues to be 75-80% of FY20 revenues

Time Technoplast conducted conference call on 15^th February 2021 to discuss the financial results and performance of the company for the quarter ended Dec20. Managing Director Mr. Anil Jain and Director- Finance Mr. Bharat Vageria addressed the call
Highlights of the Concall

Domestic revenues stood at 67% of total revenues in 9MFY21 while overseas formed 33% of revenues as against 70% domestic revenues and 30% overseas revenues at the end of FY20 due to lower effect of covid-19 in overseas operations.

Value added products de-grew by 19.2% in 9MFY21 as compared to 9MFY20, while established products de-grew by 23.7%. The share of value added products is 21.4% of total sales in 9MFY21 as against 20.4% in 9MFY20. The company's focus remains to increase the share of value added products in its revenue and improve margins

Overall capacity utilization during 9MFY21 was 60%. Domestic capacity utilization was 57% while overseas was 65%

The company took time to stabilize its operation post covid-19 as it is labor intensive. PE pipe business was worst affected. The contractors do not take the delivery of the pipe inspite of having enough order as they didn't have enough labor on site to be able to lay down the pipeline. The company has healthy order book in PE Pipe business of Rs 250 crore

Also the company feels the state government diverted all their funds for fighting COVID and they were not able to pay to the contractor, as a result of which they would not supply anything at site until their old payments were clear.

The company feels situation is getting back to normal and it expects in Q4 to get back to pre covid levels.

Supply of newly launched new generation multilayer pipes for power/communication cable duct with silicon in-lining continues to get overwhelmed response

The pipes/ducts have substantial business potential especially in government projects like Smart Cities, Jal Jeevan Mission and Swachh Bharat Mission.

Packaging demand may get a boost from countries preferring to buy from India from earlier China.

The company expects plastic drums to have a regular growth of 4-5% while it sees a significant jump in demand of intermediate bulk containers. Intermediate bulk containers are a highly technical product and it comes under value added products enjoying higher margins.

The company received overwhelming response for industrial packaging products i.e. IBC and large sized drums, from all the three locations in USA i.e. Chicago, Houston and Iowa.

The company has received in August 2020 coveted approval from Petroleum And Explosives Safety Organization (PESO) and Bureau Veritas for the first time for Indian Cylinder under International Standard ISO:11119-3:2013 as applicable for manufacturing of Fully Wrapped Carbon Fibre Reinforced Type-IV Composite Cylinder for CNG Cascades. This highly technical product has huge business potential and has been developed by Company's R&D Team in last 3 years. The company is executing initial orders and is in talks with various gas distribution companies for larger orders.

Type-IV Composite Cylinders contributed Rs 54 crore to total revenues in Q3FY21 with a margin of around 19-20%. The company is in talks to OMCs for Type-IV Composite Cylinders but all oil marketing companies still stuck to steel cylinder. The company is currently supplying in 38 countries overseas and has approval in about 58 countries.

The company has an order book of around 1.3-1.4 million CNG gas composite cylinder valuing around Rs 240 crore.

The company innovating new applications of the MOX films and is launching new products in the market like Truck covers, Pond Liners, Mulching Film & Poly house Films. The company is focussed on export markets of Thailand, Malaysia, Germany UK & USA.

The Scheme of Amalgamation is under process between the following companies to consolidate common infrastructure and achieve operational synergies- TPL Plastech Ltd. (75% subsidiary of the Time Technoplast Limited) and Ecotech Green Lifecycle Limited (Wholly Owned Subsidiary of TPL Plastech Ltd.) and NED Energy Ltd. (97% subsidiary of the Time Technoplast Limited) and Powerbuild Batteries Pvt. Ltd. (Wholly Owned Subsidiary of NED Energy Ltd.).

Total Debt in 9MFY21 reduced to Rs 809 crore as against Rs 832 crore in FY20. The company didn't have enough people available to be able to meet demand of customers while customers, distributors delaying the consignment due to labour problem at their end. Currently the situation has got back to normal.

The company expects FY21 revenues to be 75-80% of FY20 revenues. The company expects Q4FY21 performance to be better than Q3FY21.

The company expects pipe business to clock revenues of around Rs 400 crore in FY222 from expected revenue of Rs Rs 160-170 crore in FY21

Total capex in 9MFY21 was Rs 62 crore- Rs 35.4 crore was towards established Products for capacity expansion, re-engineering and automation and Rs 26.6 crore towards value added products

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