Time technoplast

My overall impressions from FY24 results:

Divestment – After small divestment in West Asia (Middle East region), no more selling of overseas business expected in FY25. India facilities/land will be consolidated and some real estate may be sold with proceeds mostly used to pay off still considerable debt. With prolonged due diligence activity for overseas business divestment, I’ll wait for final figures on real estate sales, currently no expectation on numbers.

CNG Cascades – FY25 sales expected to be ~80-85% more than FY24 with same % profitability.

     While a current customer (Confidence Petroleum) claims to be ready with Type-4 CNG Cascades by this year, it is unknown how near they’re to PESO certification (atleast 1.5 years process). Surprisingly Confidence Petro has good amount of CNG Cascade Type-1 business both stationary/mobile with enterprise customers like BPCL. Not sure if/why Time Techno hasn’t cracked this segment.

LPG – going on BAU mode with expected IOC repeat order (~7.6L) utilizing most realizable capacity of 1M. Similar revenues for FY25 as FY24.

IBC – After revenue growth with big capex last year, expect a slightly smaller growth.

Overall a lot better than expected results, pleasantly surprised that company beat my estimate of 650-675 crores FY24 EBITDA. Expecting ~800-820 crores EBITDA this year, driven more by CNG Cascades expansion playing out + debt reduction leading to lesser interest out-go.

Company had low utilization of LPG Type-4 capacity since 2013 when they launched. While they expanded capacity in 2017, still it took till 2023 for full utilization. Don’t see LPG being growth contributor for atleast another year.

Company has clarified in last cc that currently there’s no hydrogen cascade use-case and they’re just being ready. Not sure if today’s stock jump is just due to hydrogen cascade PESO certification news.

Discl: Invested since 2018, added more till 2023, big part of portfolio both by cost(16.5%) & value (21.6%).