- 14 Nov 2022
- ICICIdirect Research
Time Technoplast's value-added products drive topline
TIMETECHNO - 250 Change: -5.65 (-2.21 %)News:
Time Technoplast reported revenue growth of 12% YoY to ~Rs1024 crore in Q2FY23, came on the back of demand pick up in both of its Polymer and value-added product segments. The value-added segment revenue (revenue share of ~34%) increased by 17% YoY to Rs 350 crore. The established product includes Drums, Pipes etc (revenue share of 66%) grew at ~9% YoY to Rs 674 crore. Despite gross margin fall of 230 bps YoY, savings in other expenses restricted overall EBITDA margin fall at 127 bps YoY to 13%. Finally, PAT at Rs 51 crore remained flat on a YoY basis.
View:
We believe, company’s Q2FY23 performance was largely driven by value added product segments. Value added product segment contribution to overall revenue has increased from 30% in pre-Covid level to 34% by the end of Q2FY23 led by strong demand of composite cylinders. However, the EBITDA margin at 13% is 100 bps lower than its’ pre-Covid level margin dragged by higher raw material costs (use of high-cost inventories). The company is looking to raise funds by restructuring its overseas business and ramp up of composite cylinder capacity. We await management commentary on development from this front and new order inflows in the composite products category. We believe the company is likely to utilise the proceeds (received from restructuring) for the capex of its fast-growing Composite Cylinders (LPG/CNG/Hydrogen) & core business in India.
Impact:
Neutral