CRISIL assigns valuation grade of 4/5 to Time Technoplast

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CRISIL assigns valuation grade of 4/5 to Time Technoplast

CRISIL Research has come out with its report on Time Technoplast. The research firm has maintained the fundamental grade of 4/5 to the company in its November 10, 2011 report.

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Time Techno BSE | NSE 31/05/12 Are Mutual Funds betting on Time Techno?

CRISIL Research has come out with its report on Time Technoplast . The research firm has maintained the fundamental grade of 4/5 to the company in its November 10, 2011 report.

Time Technoplast Ltd's (Time's) Q2FY12 results were below CRISIL Research's expectations. While revenue increased ~9% y-o-y (up 40% y-o-y in Q1FY11) and was below our expectation, PAT fell by 36% y-o-y due to tapered revenue growth and lower margins. We continue to remain positive on Time's growth prospects in view of its leadership position in the industrial packaging market, expansion into new Asian markets and innovative product launches. We may revisit our estimates post interaction with the management. We maintain our fundamental grade of 4/5.

Q2FY12 result analysis:

• Consolidated revenues grew at a moderate 9.4% y-o-y and 2.4% q-o-q to Rs 3.6 bn. While revenues from the polymer products segment grew at a slower pace at 14.2% y-o-y to Rs 3.0 bn, composite products segment registered a de-growth of 11.5% y-o-y to Rs 541 mn. In contrast, revenues grew by 40% y-o-y in Q1FY11 driven by growth in both the segments - polymer (44%) and composite products (11%). We will be able to provide more clarity on slowdown in growth post our interaction with the management.
• EBITDA margins declined by 331 bps y-o-y and 265 bps q-o-q to 15.9% due to increase in overhead costs compared to the corresponding quarter of FY11.
• PAT fell by 36.3% y-o-y and 32.6% q-o-q to Rs 192 mn driven by lower revenue growth and the decline in EBITDA margins.

Valuations: Current market price has an 'upside' We continue to use the discounted cash flow method to value Time. Our current outstanding fair value is Rs 71 per share. At the current market price, the valuation grade is 4/5.

Disclaimer: This report (Report) has been commissioned by the Company/Investor/Exchange and prepared by CRISIL. The report is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. Opinions expressed herein are CRISIL's opinions as on the date of this Report.  The Data / Report are subject to change without any prior notice. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information of the authorized recipient only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied in whole or in part especially outside India, for any purpose.

© CRISIL Limited . All Rights Reserved. Published under permission from CRISIL"

To read the full report click on the attachment