Hold Time Technoplast; target of Rs 58: ICICI Direct

ICICI Direct recommended hold rating on Time Technoplast with a target price of Rs 58 in its research report dated February 18, 2021.

February 18, 2021 / 02:42 PM IST
 
 
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ICICI Direct's research report on Time Technoplast


Time Technoplast reported an improved QoQ recovery in Q3FY21 supported by improved demand from user industries. While the management expects pre-Covid level sales in Q4FY21 over Q4FY20, the FY21 revenue recovery is likely to be in the range of 75-80%. Going forward, the management anticipates a normalised FY22 with focus on increased revenue contribution from value added product (currently ~21% of topline) and execution of orders in the PE pipe segment (order book is ~Rs 250 crore). On the balance sheet front, the company is looking at RoCE of ~20% in the next three years supported by improved plant utilisation and margin profile (due to rising contribution of value added product category).



Outlook


We tweak our earnings estimate upward by ~11% and 4% for FY21 and FY23E, respectively. We believe improved product mix would help drive EBITDA margin going forward. Further, marginal debt reduction via positive CFO would keep overall D/E below 0.5x. We maintain HOLD on the stock with a revised TP of Rs 58 (valuing at 4x EV/EBITDA FY22E, earlier TP Rs 43).


For all recommendations report, click here


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first published: Feb 18, 2021 02:42 pm

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