Robust outlook; attractive valuation
We remain upbeat on the robust prospects of Time Technoplast (TIME) and expect healthy returns on the stock, which is currently trading at an attractive valuation of ~15x FY27E P/E.
The company is working on several new products that are either under development or in advanced stages of OEM approvals, offering significant growth potential.
The recent fundraise of INR8b will be used towards growth capex and debt reduction, further enhancing the company’s prospects.
Management guidance of over 15% volume growth and a higher growth in PAT for the next few years remains intact, driven by a 20-30bp margin expansion annually and savings on finance costs.
The company also targets an RoCE expansion to 20% in FY26 from ~18% in FY25; RoCE is likely to rise 2% per annum thereafter.
Capex of 600 composite CNG cascades is scheduled to be commissioned in 4QFY26, taking the total capacity to 1,080 units, with a revenue potential of INR8b.
Discussions with auto OEMs are ongoing to supply individual cylinders for cars and buses. This is an untapped market currently.
Driven by a robust outlook and attractive valuation, we reiterate our BUY rating on TIME with a TP of INR289, based on 22x FY27E P/E. Our TP implies an upside potential of 44%.
