Time Technoplast conducted conference call on 15 November 2022 to discuss the financial results and performance of the company for the quarter ended Sep'22. Mr. Sanjaya Kulkarni - Chairman & Independent Director, Mr. Bharat Vageria, Managing Director, Mr. Raghupathy Thyagarajan, Whole-time Director, Mr. Sandip Modi, Sr. VP - Accounts & Corp. Planning and Mr. Hemant Soni, Head – Legal of the company addressed the call

Highlights of the Concall

• Value added products grew by 22% in Q2FY23 as compared to Q2FY22, while established products grew by 9%. The company's focus remains to increase the share of value added products in its revenue and improve margins. Value added products grew by 28% in H1FY23 as compared to H1FY22, while established products grew by 15%

• Total Debt reduced by Rs 14.5 crore in H1FY23 from year ended FY22.

• Pipe segment showed signs of improvement in H1FY23 with reduction in polymer prices, inflow of new orders and release of funds to EPC contractors by government authorities for ongoing projects. The pipes/ducts have substantial business potential especially in government projects like Smart Cities, Jal Jeevan Mission and Swachh Bharat Mission

• The company incurred capex of Rs 108 crore in H1FY23 which includes Rs 37 crore for capacity expansion, reengineering and automation of established products and Rs 71 crore for value added products

• Overall capacity utilization during H1FY23 was 78%. India capacity utilization was 73% while overseas capacity utilization was 85%.

• The company has a continued focus on improving working capital cycle time and targets to achieve 90 days in next 12-18 months.

• The company has approved the consolidation cum restructuring of overseas business in full/part by way of disinvestment of majority stake to strategic partner/ investor partner. The proceeds will be used for repayment of debt, capex for composite cylinders (LPG/CNG/Hydrogen) & core Business in India to meet huge market demand and will also be used to benefit the shareholders.

• USA continue to show healthy performance as good demand for IBCs and large sized drums continues

• Brownfield expansion in India and overseas locations is expected to continue for future growth and leveraging of existing infrastructures.

• The company expects volume growth of 15% going forward.

• Supplies are on-going for 0.75 million Type-IV LPG Composite cylinders received from Indian Oil Corporation Limited (IOCL). On completion of supplies for above order, the same order quantity may be repeated at the discretion of IOCL for a further period of up to 12 months, on same terms and conditions.

• Current order book position of Composite Cylinder (Cascades) CNG business is over Rs 225 crore. The company is not taking any fresh orders as its capacity is full.

• The company expects around Rs 700 crore from composite cylinder (Cascades) CNG business.

• The company plans to take orders in composite cylinder (Cascades) CNG business at increased capacity with higher prices.

• The company is seeing continued good response from overseas customers for composite cylinder (LPG application). The company currently has approvals in over 50 countries and is exporting composite cylinders to over 42 nations. It has also added new customers in newer geographies.

• Ebitda margin was impacted during the quarter due to sudden jump in foreign exchange and raw materials. The company is able to pass on any increased cost to its customers and it will gain the lost Ebitda in H2FY23.

• The company expects revenue of Rs 5000 crore on a consolidated basis in three years down the line.

• The company expects to improve its ROCE to over 19% from current 13.5-14% over next few years.