Time Technoplast held its conference call after it declared its June 2015 quarter results. Anil Jain, Managing Director of the company addressed the call.

Highlights of the call

For the quarter ended June 2015, it registered a 7% rise in consolidated sales to Rs 607.736 crore. OPM improved from 13.9% to 14.0% which saw OP rise 7% to Rs 85.33 crore.

Other income rose 55% to Rs from Rs 6 lakh to Rs 9 lakh and interest cost fell 8% to Rs 24.97 crore. As depreciation fell 1% to Rs 23.19 crore, PBT went up 29% to Rs 37.26 crore.

Tax grew 8% to Rs 7.77 crore after which PAT went up 36% to Rs 29.50 crore.

Minority interest grew 3% to Rs 1.07 crore after which net profit went up 38% to Rs 28.42 crore.

India sales are Rs 402 crore accounting for 67%, rest came from overseas.

Indian business value growth is 3% and overseas is 14% in June 2015 quarter.

Q1 is the weakest quarter and it accounts for 20-21% of annual sales.

Debt stands at Rs 759 crore against Rs 804 crore as of March 2015.

Working Capital cycle is at 84 days. In India it is 89 days and for overseas it is 71 days.

RoCE is 13.03% In India it stands at 12.7% and for overseas it stands at 13.7%. RoCE in Q1 is less. RoCe shall exceed 14% for FY 2016.

The company would like to increase cylinder capacity from 300000 cylinders to 400000 cylinders.

Demand for composite cylinders comes from Philippines, Indonesia Thailand and Middle East. Western Africa also is seeing good demand. The company has also received orders from Italy and Germany.

Order book for FY 2016 is 301180 cylinders.

The company hopes to do total sales of Rs 2750 crore in FY 2016.

The company had meetings with the bankers and has requested to reduce the interest rate. This is expected to reduce interest cost to Rs 95 crore in FY 2016.

Tax rate will be in the range of 25% in FY 2016.

Volume growth is expected to be at 10% in FY 2016. It has revised this number from 15% given in March 2015 quarter.

EBITDA should grow by 15% in FY 2016.

Debt is likely to remain at Rs 800 crore in FY 2016

As EBITDA will grow fast debt/EBITDA will fall to 2.09 in FY 2016

Packaging accounted for 68% of sales, Life style accounted for 9%, Auto 8% and Infra 15% in FY 2015. This will more or less remain same in FY 2016.

Depreciation is expected to be Rs 95 crore in FY 2016 and Rs 115 crore in FY 2017.

Indian capacity is running at 85% and overseas capacity is running at 65%. Blended capacity utilization is 75%.

The company will set up a new facility in Dahej for its industrial packaging business.

Q1 Capex is Rs 19 crore. FY 2016 normal capex target is Rs 75 crore.

In FY 2015 the company did capex of Rs 95 crore.

In FY 2016 it has planned normal capex of Rs 75 crore.

In FY 2017 the company will have normal capex of Rs 60-65 crore.

Apart from the normal capex it will do capex of 175 crore for setting up of 4 plants. This capex should be complete in FY 2017.

The company is looking at 5 years prospective plan for the company. Till now the company used to plan for 2 years.

Accordingly: in five years

The company would like sales to double of what it is now.

RoCE should move to 21% and above. Though it is ambitious the management feels that it can do it.

Debt/ebidta is targeted to reduce from current 2.35 to 1

WC cycle is planned to reduce from 81 days in FY 2015 to 75 days.