CRISIL maintains fair value of Rs 62 to Time Technoplast

2622 Investors following Time Techno. Share this News with them.

0

Like this story, share it with millions of investors on M3

CRISIL maintains fair value of Rs 62 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 March 5, 2012 report.

Post your opinion here

 

0

Tweet

Share on Tumblr

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 March 5, 2012 report.

Time Technoplast Ltd's (Time's) Q3FY12 revenues exceeded CRISIL Research's expectations due to strong business momentum in the polymer business. While EBITDA exceeded our expectations driven by higher revenue, EBITDA margin was lower than expected due to forex losses incurred on un-hedged payables for imported raw material. Also, initial low utilisation of new capacities in international locations further depressed margins. Accordingly, PAT margin was lower than expected. We have increased the revenue estimate for FY12 while we have broadly maintained earnings estimates due to lower margins. Also, while we have maintained FY13 revenue and earnings estimates, we believe that the margins will be under pressure in FY13; we will come out with a detailed report post discussion with the management in the coming weeks. We are cautious on the progress of the company's international ventures given the fragile macroeconomic environment. However, we remain positive on the longterm fundamentals of the company driven by its strong position in the domestic market. Hence, we maintain the fundamental grade of 4/5.

Q3FY12 result analysis (consolidated)
• Q3FY12 revenue grew by 23.2% y-o-y (11.9% q-o-q) to Rs 3.98 bn. Revenue of the polymer business increased by 29% y-o-y (12% q-o-q) to Rs 3.4 bn and continued to contribute 85% to total revenue. However, revenue from the composite products business declined by 2% y-o-y (up 14% q-o-q) as the company witnessed slowdown in telecom battery sales.

• EBITDA remained flat y-o-y (up ~12% q-o-q) to Rs 633 mn. EBITDA margin declined by 372 bps y-o-y (flat q-o-q) to 15.9% as the company booked Rs 61 mn (Rs 70 mn in Q2FY12) due to forex losses incurred on uncovered foreign currency payable for importing raw material. Also, the other expenditure was higher as the company's new capacities in international locations are running below optimal capacity utilisation since it is the first year of commissioning.

• Depreciation increased by ~10% y-o-y (3% q-o-q) and interest and financing charges increased by ~57% y-o-y (~8% q-o-q). As a result, PAT declined by ~16% y-o-y (up ~24% q-o-q driven by strong revenue growth) to Rs 237 mn. PAT margin declined by 274 bps y-o-y (up 56 bps q-o-q) to 6%. Q3FY12 EPS was Rs 1.1 vs. Rs 1.3 in Q3FY11 and Rs 0.9 in Q2FY12.

Valuations: Current market price has upside
We continue to use the discounted cash flow method to value Time and maintain the fair value of Rs 62 per share. Consequently, we revise the valuation grade to 4/5 from 5/5 earlier.

To read the full report click on the attachment

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"