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Last Updated : Mar 27, 2017 03:35 PM IST | Source: CNBC-TV18

Expect to double cylinder capacity, to reach 1.4 million by June: Time Technoplast

Time Technoplast have a capacity of 700,000 cylinders, said Anil Jain, MD of the company.

Anil Jain, MD,  Time Technoplast  is upbeat on the business outlook going forward. He said the company aims to double the cylinder capacity from the current 7,00,000 to 14,00,000 by June.

Below is the transcript of the interview.

Nigel: The big kicker of your business is the cylinder business, the composite product business. I believe your total capacity is around 700,000 currently. Could you tell us is it functioning at optimum capacity utilisation and at optimum capacity utilisation what kind of revenues can we expect from this business?

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A: We have a capacity of 700,000 cylinders which came in progressively during the year. So we will end up producing 500,000 cylinders in the current financial year which would be 70-75 percent of the capacity. Right now we cannot use our entire capacity because we have different sizes of cylinders, so once we change from one size to another we lose some capacity in between because of change of time, but we are now doubling our capacity to 1.4 million cylinders and that will be coming up by middle of May or early June.

We have strong order book right now and as to asset to turnover, with an investment of about Rs 75 crore, we can do Rs 150 crore turnover on the composite cylinders. However, as we increase our capacity, this would come down a bit.

Nigel: So by June this year your capacity would have doubled from 700,000 to 140,000

A: Yes, we are looking for a capacity of 1.4 million. As of now we have a total order book of 1.8 million cylinders and we are expecting some major orders to come in to be able to meet up the requirement. So we have no choice but to increase our capacity.

Nigel: 14 lakh cylinders, what kind of revenue does it translate to. I heard that your asset turn is 1:2. So if you invest Rs 75 crore you can generate Rs 150 crore. So at 14 lakh cylinders optimum capacity, what will the revenue number look like?

A: At that time we will be in excess of about Rs 300 crore. The reason being that the bigger size cylinders though they fall within same capacity but the revenue will be much higher, so we are looking at about Rs 300 crore at that time.

Sumaira: One of the concerns analysts had, was regarding your return on capital employed (RoCe) trend. If I look at it from FY13 onwards, it has been in low double digits. You had indicated that it could be closer to 22 percent by 2020-2021 but could we get a nearer timeframe, say FY18 itself. What are you expecting on that front?

A: Going back to our RoCe, we had invested Rs 650 crore in our overseas operations as we went to about nine countries. In the initial stages they have been burning some cash so our RoCe came down but we made a prediction last year that our RoCe from 13 percent will be growing at 2 percent every year. So this year we are expecting that from 13 percent it will go up to 15 percent and going up to 2021 it will be about 22 percent and we will maintain that. So the next year it will be about 17 percent.

For entire interview, watch accompanying video.

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First Published on Mar 27, 2017 03:34 pm
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