Time Technoplast

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Time Technoplast

Leading through

Innovations & Technology

Blog: http://dharmawat.blogspot.com/

Niteen S Dharmawat

http://dharmawat.blogspot.com/

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IMPORTANT DISCLAIMER: This presentation is prepared solely to provide information about this company and take feedback from the readers. This presentation is NOT meant for equity investment. It should NOT be construed as an investment advice for buy/sell/hold or anyother form of recommendation. This presentation does not recommend any price or price target for the company discussed. Investment in equity shares has its own risks. The information contained herein is based on my study and upon sources that I consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and not intended for any investment decisions. I am not responsible for any profit or loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the discussion thread above/anywhere in communication. It is safe to assume that I, my family, friends have vested interest in any of the companies/stocks discussed/presented here. Please do your due diligence and take the help of a qualified advisor/registered research analyst before you take any financial decision. I am neither of these.

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“If you are shopping for common stocks,

choose them the way you would buy groceries,

not the way you would buy perfume.”

Benjamin Graham(Father of value investing)



About Time Technoplast

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Background…

A multinational conglomerate with operations in Bahrain, Belgium, China, Egypt, Indonesia, India, Korea, Malaysia, Poland, Romania, Singapore, Sharjah, Taiwan, Thailand, Vietnam is a leading manufacturer of polymer products

One of the two largest producer of polymer drums worldwide

By far the largest market share of polymer drums in India

Technology driven innovative products

28 manufacturing units & 10 regional and marketing offices

Over 500 institutional clients and distribution / dealer network spread over 345 cities and towns



Financials

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Summary…

CMP: INR 50 v/s Book Value 55

Revenue: INR 2472 Cr, NP: INR 138 Cr (TTM)

Market Cap: ~INR 1040 Crs

Debt: INR ~800Crore (area of concern but debt is reducing now)

Strong Operating Cash Flow

Company is currently running at low utilization levels

Return on Equity: 5Yrs 13%, 3Yrs 12%, Last Yr 11%

Capex of 900Crore in last 5 years. Capex cycle ending and free cash flow expected to improve in the future

Dividend yield: 1.01% (paying dividend since listing year)



Financials

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Summary…

Initial Public Offering (IPO) in 2007

IPO Oversubscribed 49.55 times (Retail 12, HNIs 71 and QIP 69 times)

IPO Price 31.5. Listing day Price: 49.9. (adjusted for split)

Ever high price 100+ in 2007 (adjusted for split)

V/S

CMP 50

Since IPO, revenue increased 6 times and NP by 3.35 times

High promoters’ shareholding (PSH) at ~58.5%.

Unpledged 45% and pledged getting released. After removing pledged from PSH, their

holding is comfortably high

Worldwide business activities are conducted through representation in more than 130

countries.

Institution holding around 30%

HDFC holding 8.65% shares for a long time

FIIs holding 20.76%

Public holding around 12%



Time Technoplast

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In INR Crores.

Net Profit (NP) V/S Operating Cash Flow (OCF)…

Remember Opto Circuit & Arshiya Int., investors lost everything – why?

OCF 119.48 -28.05 -9.38 13.83 -10.19 -15.50

Signal

Parameter Mar 2012 Mar 2011 Mar 2010 Mar 2009 Mar 2008 Mar 2007

Net profit 47.51 24.93 15.40 18.49 12.36 3.98

Arshiya International:

CFO 126 130 178 115 40

Signal (Red)

Parameter Mar 2012 Mar 2011 Mar 2010 Mar 2009 Mar 2008

Net profit 573 368 260 209 131

Opto Circuit:

OCF 270 214 221 161 140

Signal

Parameter 2015 2014 2013 2012 2011

Net profit 110 99 103 89.7 111



Parameter Dec 2014 Sep 2014 Jun 2014 Mar 2014 Dec 2013 Sep 2013 Jun 2013 Mar 2013

UnpledgedPromoters’ SHP

48.97 50.46 48.97 46.7 40.33 40.3 45.06 46.77

Signal• Healthy promoters’ holding to 58.5%• Pledged shares getting released.

Time Technoplast

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Shareholding Pattern (SHP)…

SHP Pledged 32.13 23.87 25.36 17.97 17.47 11.01

Signal

Parameter Sep 2012 Jun 2012 Mar 2012 Dec 2011 Sep 2011 Jun 2011

SHP Unpledged 12.46 19.36 17.87 25.26 25.73 32.19

Opto Circuit: from 140 to now 25

Name of Acquirer/SellerBharat Vageria

Bharat Vageria

Bharat Vageria

Aruna Vageria

Aruna Vageria

Aruna Vageria

Arun Vageria

Aruna Vageria

Aruna Vageria

TotalReported to Exchange 29-Aug-13 22-Aug-13 3-Jun-13 3-Jun-13 3-Apr-13 25-Mar-13 5-Mar-13 6-Sep-12 5-Sep-12

Buy/Sale B B B B B B B B B

Mode of Buy/Sale Market Market Market Market Market Market Market Market Market

No. of Shares 31703 22555 11000 11162 15656 16765 16258 33127 33127 1,91,353

• Promoters increasing stakes since Sep 2012 • 2.5% stake sold in Dec’2014 QTR picked up by Morgan Stanley

Source: www.bseindia.comBlog: http://dharmawat.blogspot.com/

http://www.bseindia.com/


Time Technoplast

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More than 1% holding from Public/Institution Category…

Source: www.bseindia.com

Sl. No. More than 1% Holding % of Total Shares

1 HDFC Prudence Fund 8.65

2 American Insurance Series Fund 5.66

3 Morgan Stanley Asia 5.2

4 Gradeur Peak Fund* 4.0

5 Government Pension 1.63

6 India Business Excellence Fund 1.54

7 Others 2.75

Total 29.43

• HDFC holding consistent for last several years

* Merged for same shareholders entity

• Promoters holding=58.5%

• FIIs+DIIs+Corp >= 29.43%

• Public =< 12%




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Pick up good companies with good

managements when their share prices are at

an eight-year or 10-year low

Chandrakant Sampat(The Magician of D-street, Indian Warren Buffett.)

Price chart… Eimco Elecon

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Summary…

Stagnant during 7 years

10 times in 7 years.

HDFC entered somewhere here& continue to hold 4.79%….

More than 2.5 times in 11

months.

See Eimce Elecon PPT: http://goo.gl/FKmDcX


Now 400+dividends


http://goo.gl/FKmDcX



Price chart… Paper Products (HPPL)

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A stagnant stock…

Stagnant during last 7 years

* adjusted for any split/bonus

Price is the closing price at the end of the year

More than 6 times in 5 years.

See Paper Products PPT: http://goo.gl/9NeGKj

More than 3 times in 14 months.


Now 302+dividends


http://goo.gl/9NeGKj



Price chart… Time Tech

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A stagnant stock…

Stagnant during last 7 years

* adjusted for any split/bonus

Price is the closing price at the end of the year


HDFC bought 8.65% here and continue to hold.




Key Competitors

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Business Division Competitor

Industrial packaging Balmer Lawrie, Sintex Industries

Infrastructure products

Supreme Industries, Finolex Industries, Astral Poly Technik, Jain Irrigation, Tulsi Extrusions, KisanGroup, Nandi Group, Rungta Irrigation, Nilkamal, Wim Plast, National Plastics, Prima Plastics

Lifestyle products Unorganized segment with large number of players

Auto ComponentsInnovative products and as such no majorcompetitor.

Material handling products (New products)

Time entered into a JV with Schoeller Plast Industries in India. Schoeller is the largest player in material handling.

Composite cylinders (New products)

Until recently only two players in the world who have technology to manufacture; Supreme Industries launched Composite Cylinders recently.



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“Go for a business that any idiot can run -

because sooner or later, any idiot probably is

going to run it.”

Peter Lynch(Legendary Investor)

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Product PortfolioA multinational Technology driven company…

Source: company websiteBlog: http://dharmawat.blogspot.com/


Product Portfolio

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A multinational Technology driven company…

Source: company websiteBlog: http://dharmawat.blogspot.com/


Industrial Packaging Products

18Source: company website

• Largest division with ~60% revenue



Technical & Lifestyle Application Products

19Source: company websiteBlog: http://dharmawat.blogspot.com/


Infra Products



Composite Gas Cylinders

21Source: company website

Must watch video here: http://www.litesafecylinders.com/


http://www.litesafecylinders.com/


Material Handling Solutions



Revenue Breakup



Opportunities - Industrial Packaging



Opportunities – Non Packaging



Key Customers



Global Presence



Acquisitions…



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Even the ignorant may appear very worthy,

If they keep silent before the learned.

Thiruvalluvar(A celebrated Indian poet and philosopher whose contribution to Tamil literature is

the Thirukkural, a work on ethics.)

What to expect…

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Future holds promosing…

Chemical plants moving to India/East due to various environmental concerns overseas

Value adding company hence should benefit from lower input prices (crude-petrochem)

Broad product portfolio in products which should have good demand

Capex completed

Low utilization, if managed, could trigger operational improvements

Global presence and known for quality products

LPG distribution through private sector in India

Government’s focus on sanitation, infrastructure and housing sector

Good marketing - they know how to sell their story



Risks and Mitigation

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• Debt

• Reducing debt, last year paid back

• Crude price movement

• Lower crude prices to benefit in long term, but volatility may impact margins

• Subsidiaries/JV etc. contribute to > 50% of sales but very small contribution to profit

• Closing some overseas operations which are not performing

• A bit over ambitious

• Hope they walk the talk: Stop investing now & start reaping the reward on investment

• CFO is member of the audit committee - not good governance

• Chairman of the audit committee is the Chairman of the company and is a non-executive

• Very low salary for and MD and CFO - does not appear to be correct picture - so some lack of transparency here

• Very large contingent liabilities in form of guarantees to subsidiaries & too many acquisitions in last 7 years

• Limited float in the market



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About the presenter:

Niteen is an MBA and cleared CFA Level 2, CFA Institute USA. A firm believer in long-term financial planning, and a 20 years veteran of the stock market. He also conducts free investor awareness sessions.

He likes reading books/magazines/news papers on the topics as diverse as general management, technology, investment, fiction, marketing and the Gita.

He is a person who believes in "Everything else can stop but learning".



Thank you

Email: [email protected]

Mobile: 9850571857


Twitter: @niteen_india

Slideshare: www.slideshare.net/ndharmawat/

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mailto:[email protected]


http://www.slideshare.net/ndharmawat/

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IMPORTANT DISCLAIMER: This presentation is prepared solely to provide information about this company and take feedback from the readers. This presentation is NOT meant for equity investment. It should NOT be construed as an investment advice for buy/sell/hold or anyother form of recommendation. This presentation does not recommend any price or price target for the company discussed. Investment in equity shares has its own risks. The information contained herein is based on my study and upon sources that I consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and not intended for any investment decisions. I am not responsible for any profit or loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the discussion thread above/anywhere in communication. It is safe to assume that I, my family, friends have vested interest in any of the companies/stocks discussed/presented here. Please do your due diligence and take the help of a qualified advisor/registered research analyst before you take any financial decision. I am neither of these.

Time Technoplast

Business

Transcript of Time Technoplast