Small-cap packaging player Time Technoplast Ltd shares soared over seven percent during the morning deals on Monday, June 9, after domestic brokerage Motilal Oswal initiated coverage on the firm with a bullish rating.
Motilal Oswal issued a 'buy' rating on Time Technoplast shares, with a target price of Rs 578 per share, which implies a 41 percent upside, compared to the previous session's closing price of Rs 411 apiece.
"Our positive stance is backed by the company’s strong growth prospects, improving return ratios and attractive valuation," said the brokerage.
At 10.30 am, shares of the firm were quoting Rs 437.85 apiece, higher by 6.7 percent, after slipping mildly off the day's high.
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Time Technoplast is the world’s largest manufacturer of large-size plastic drums, with an impressive 50-60 percent market share in India and a significant share in 10 other countries. It was the first company to launch intermediate bulk containers (IBC) in India and is now the third largest IBC manufacturer worldwide. Additionally, the firm ranks as the second largest global manufacturer of Type-IV composite LPG and CNG cylinders, noted the brokerage.
"We are optimistic about its value-added composite products (LPG and CNG cascade cylinders), stable and long-standing industrial packaging (drums, jerry cans, IBC etc.) business, and focus on improving financials to turn net debt-free over the next 1-2 years," MOSL added.
The firm recorded a CAGR of 16 percent, 19 percent and 39 percent in revenue, EBITDA, and PAT, respectively over FY2021 to FY2025, led by strong performance in its value-added product segment and strong cash flow generation.
Going ahead, asset monetization, business restructuring, and cost reduction measures will improve operational efficiency and strengthen the balance sheet. The firm is in the process of monetizing a few non-core and non-performing assets in India, restructuring its business and reducing costs.
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