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CRISIL IERIndependentEquityResearch
CRISIL
Fundamental Grade
Assessment
CRISIL
Valuation Grade
Assessment
5/5
Excellent fundamentals
5/5
4/5
Superior fundamentals
4/5
3/5
Good fundamentals
3/5
2/5
Moderate fundamentals
2/5
1/5
Poor fundamentals
1/5
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Last updated: May, 2013
Analyst Disclosure
Each member of the team involved in the preparation of the grading report, hereby affirms that there exists no conflict of interest that can bias
the grading recommendation of the company.
Disclaimer:
This Company commissioned CRISIL IER report is based on data publicly available or from sources considered reliable. CRISIL Ltd. (CRISIL)
does not represent that it is accurate or complete and hence, it should not be relied upon as such. The data / report is subject to change
without any prior notice. Opinions expressed herein are our current opinions as on the date of this report. Nothing in this report constitutes
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Valuation Grade
Industry
Fair Value
CMP
KEY FORECAST
( mn)
Operating income
EBITDA
Adj net income
Adj EPS ()
EPS growth (%)
Dividend yield (%)
RoCE (%)
RoE (%)
PE (x)
P/BV (x)
EV/EBITDA (x)
Excellent
Fundamentals
5
4
3
2
1
Poor
Fundamentals
Valuation Grade
Strong
Upside
Strong
Downside
CFV MATRIX
Fundamental Grade
After consolidating its leadership position in the domestic industrial packaging market, Time
Technoplast Ltd (Time) forayed into the international market over FY08-13 by establishing
manufacturing facilities in 10 countries. The company has been able to establish and ramp up
operations in four countries and is slowly ramping up sales in the more-recently entered six
geographies. Its other businesses (35-40% of revenues) industrial batteries, HDPE pipes
and prefabricated shelters, lifestyle and auto products are yet to attain scale. We expect the
packaging business to continue to account for a majority of Times revenues (62% in FY13),
but expect profitability to be under pressure due to rising costs and weak demand in the
domestic market. We maintain our fundamental grade of 4/5.
47
29
5851/19804
TIMETECHNO/
TIMETECNO
1
210
6,293/98
14,569/228
54/28
1.0
38.1
17,240
0.53
SHAREHOLDING PATTERN
100%
90%
80%
70%
18.7%
19.1%
19.1%
8.7%
8.7%
8.7%
8.7%
10.8%
10.4%
10.4%
10.8%
61.9%
61.9%
61.9%
61.9%
Dec-12
FII
Mar-13
DII
Jun-13
Others
60%
18.7%
50%
40%
30%
20%
10%
FY11
12,591
2,364
1,077
5.1
18.5
1.9
16.8
17.1
5.8
0.9
5.1
FY12
15,095
2,444
898
4.3
(17.0)
1.6
13.3
12.2
7.0
0.8
5.7
FY13
17,757
2,920
1,035
4.9
15.2
1.6
13.8
12.5
6.1
0.7
5.0
FY14E
21,369
3,029
909
4.3
(12.2)
1.6
12.4
9.9
6.9
0.7
5.0
FY15E
24,639
3,567
1,201
5.7
32.1
1.9
13.8
11.8
5.2
0.6
4.3
0%
Sep-12
Pro moter
Time
NIFTY
1-m
-14%
6%
Returns
3-m
6-m
-22%
-32%
0%
0%
12-m
-29%
4%
ANALYTICAL CONTACT
Mohit Modi (Director)
Kamna Motwani
Bhaskar Bukrediwala
mohit.modi@crisil.com
kamna.motwani@crisil.com
bhaskar.bukrediwala@crisil.com
clientservicing@crisil.com
CRISIL IERIndependentEquityResearch
Product /
Segment
Industrial packaging
Infrastructure products
Lifestyle products
Automotive
components
Other products
(composite cylinders,
healthcare and material
handling products)
62%
17%
10%
8%
2%
62%
17%
10%
7%
4%
Revenue
contribution
(FY13)*
Revenue
contribution
(FY15E)*
Product /
Manufactures
polymer
and
sewage projects
barrels
containers
These
are
(IBCs).
the
used
in
chemicals,
specialty
chemicals,
paints
FMCG industries
Geographic
Domestic
presence
India
(~75%):
and
fuel
tanks,
cylinders,
handling
other industrial
radiators
batteries
as syringes, facemasks,
Prefabricated shelters
etc.
Pan India
(66%):
Pan India
Healthcare and
material handling
products are sold
International
Mainly
where
Asian
(~25%):
countries
penetration
of
International
Poland,
Thailand
Romania
only in India
The company has
two composite
cylinder facilities
Thailand,
these countries)
Taiwan,
China,
facility is likely to
Vietnam
Product /
Segment
Industrial packaging
Infrastructure products
Other products
(composite cylinders,
healthcare and material
handling products)
Automotive
components
Lifestyle products
Market position Domestic: Market leader in HDPE pipes: Time has a India: Time does not Only Indian player Composite cylinders:
India with ~70% share
small
India.
International:
Largest consists
industrial
company
The
of
the
unorganised players
player
at
locations
since
recently
entered
markets
directly
It
with
automobile
share.
consists
small
market
The
market
of
both
has is one of the smaller Astroturf is the market However, the market organised
these players in the domestic leader in Europe
market.
It
also
faces
is
currently
and
small
In
anti-spray
rain
India.
Many
unorganised players
are present in this
segment
Sales growth
27%
(FY11-FY13 2-
26%
33%
N.M.
12%
4%
in revenues from
yr CAGR)
Sales forecast
(FY13-FY15E
2-yr CAGR)
15%
bn for prefabricated
composite
sales growth)
cylinder
CRISIL IERIndependentEquityResearch
Product /
Segment
Demand
drivers
Industrial packaging
Infrastructure products
Growth in end-user
HDPE pipes
industries including
FMCG, chemicals,
infrastructure
pharmaceuticals, etc.
development
Rise in income
levels
Automotive
components
Increasing
Composite cylinders
acceptance of
Acceptance of
Increase in
innovative
composite cylinders
construction activity
polymer
by public oil
Replacement of
products in the
marketing
commercial
automotive
companies (OMCs)
properties is
sector in India
in India
Substitution of metal
market; current
penetration of polymer
drums in India is 55%
Lifestyle products
Other products
(composite cylinders,
healthcare and material
handling products)
Increase in penetration
of polymer drums in
transportation pipes
Industrial batteries
expected to lead to
more spends on
Indias directive
to make use of
anti-spray flaps
Material handling
products
compulsory for
Replacement demand
for telecom batteries
Increase in demand
Government of
Increase in retail
all commercial
penetration to drive
vehicles (earlier
they were
handling
manufacturing facilities
mandatory only
for vehicles
weighing >7.5
tonnes)
Key
Domestic:
competitors
Balmer
industry
Highly
fragmented Highly
with
unorganised players
Battery:
HBL
Systems,
Amara
fragmented Composite
cylinders:
Power
players
only
few
have
the
technology
Raja,
to
manufacture
Exide Industries
composite
Ltd,
The
number
of
unorganised players
Key risks
Slowdown in the
industries
Slowdown in end-user
larger players
unorganised
automotive
users of metal
Inability to ramp up
manufacturing
segment
sector in India
cylinders to
utilisation rates in
industrial batteries
and Europe
composite cylinders
international capacities
Competition in
Competition from
Inability to convert
Competition in the
pipes segment
international markets
Increase in polymer prices: Polymer prices (in US$) have been on an upward trend. Further, in rupee terms prices have
increased due to the recent depreciation of the rupee vs the US$. The company was unable to pass on the increase in prices in
the domestic market as the demand growth is muted. This impacted the EBITDA margin in Q1FY14. Any price increase (due to
increase in global prices or further depreciation of the rupee) is expected to further pressurise Times EBITDA margin
Grading Rationale
Weathering the local headwinds
After consolidating its leadership position in the domestic industrial packaging market, Time
forayed into the international market over FY08-13 by establishing manufacturing facilities in
10 countries. The company has been able to establish and ramp up operations in four
countries and is slowly ramping up sales in the more-recently entered six geographies. Times
other businesses (35-40% of revenues) industrial batteries, HDPE pipes and prefabricated
shelters, lifestyle and auto products are yet to attain scale. We expect the packaging
business to continue to account for a majority of Times revenues (62% in FY13), but expect
profitability to be under pressure due to rising costs and weak demand in the domestic market.
in crude oil prices recently, polymer prices in US$ are expected to remain firm in the near
term.
CRISIL IERIndependentEquityResearch
(US$)
()
(US$)
()
1,650
105,000
1,500
120,000
100,000
1,450
100,000
1,600
1,550
95,000
1,500
1,450
80,000
1,400
90,000
PP Prices in US$
1,250
PP Prices in
Q1FY14
Q4FY13
Q3FY13
Q2FY13
0
Q1FY12
Q1FY14
Q4FY13
Q3FY13
Q2FY13
Q1FY13
Q4FY12
Q3FY12
Q2FY12
Q1FY12
75,000
Q1FY13
1,250
20,000
Q4FY12
80,000
1,300
40,000
1,300
Q3FY12
85,000
1,350
60,000
1,350
Q2FY12
1,400
HDPE prices in
packaging. As per the Ministry of Finance, chemical and chemical products grew by less than
5% in FY13. The impact of this slowdown was seen on Times domestic packaging revenues,
in FY14
which grew by only 9% in FY13 vs CAGR of 17% over FY09-12. CRISIL Research expects
GDP growth to remain low at 4.8% in FY14. As a result, we do not expect any major recovery
in the chemical industry and, hence, in demand for industrial packaging in the near term.
segment, though small, is growing at a healthy pace led by demand from chemical MNCs who
have set up operations in India. Also, IBCs are preferred for exporting chemicals. Time had a
distance transportation of
90,000 IBC (pieces) capacity in Daman which it fully utilised in FY13. It has increased its
bulk materials
capacity by 2.5x to cater to the growing demand - It has doubled its IBC capacity in Daman to
1,80,000 IBCs and has also set up a 60,000 IBC capacity in Hosur, Tamil Nadu to cater to the
South India market, which it was unable to tap earlier due to high cost of transportation from
Daman to this region.
We expect the penetration of IBCs to increase in India led by its advantages over polymer
drums in long distance transportation of bulk materials. Further, Indian chemical exports are
expected to get more competitive due to rupee depreciation and, hence, are likely to record
good growth, which would add to the demand for IBCs. Driven by these factors, we expect
Times IBC revenues to grow. However, given the aggressive expansion, Time may not be
able to optimally utilise its IBC capacity over the next two years.
It can transport more material in the same space, hence freight cost is lower
Further, its resale value is similar to that of drums (resale value of one IBC is equal to that of
five-six drums). IBCs are also being used as substitutes for tankers mainly as they need not
be returned to the suppliers and, hence, there is no return freight unlike in case of a tanker.
Also, since IBCs are smaller in capacity compared to tankers (generally over 3,000-litre
capacity), they can be reused for transporting smaller orders as well.
up its utilisation levels led by growth in the petrochemicals industry in the Middle East. Also, it
entered Thailand and Taiwan through acquisitions. Revenues from these geographies have
grown at 40.5% CAGR over FY11-13 and the polymer drums capacities are currently
operating at a blended utilisation of 78%. However, the utilisation of IBC capacities is ~20% as
the company has recently added this product.
CRISIL IERIndependentEquityResearch
Since the aforementioned geographies are already using polymer drums, we believe it is likely
to be easier for the company to grow in these areas. Further, these geographies are also
expected to witness steady economic growth, which should support demand for industrial
packaging and in turn benefit Time, which is the largest industrial packaging player in most of
these geographies. Hence, we expect these geographies to continue to drive Times
international revenues in the near term.
of operations
Mode of entry
Market position
FY07
Greenfield capacity
FY07
Acquisition
(acquired in FY10)
Bahrain*
FY12
Greenfield capacity
NA
Taiwan
FY11
Acquisition
* Bahrain packaging facility was set up in the premises of Gulf Powerbeat (industrial battery
company) which was acquired by Time in FY09
Source: Company
PAT ( mn)
PAT margin
FY12
FY13
FY12
FY13
FY12
FY13
Elan Incorporated
529
684
99.77
107.90
18.9%
15.8%
Gulf Powerbeat
182
420
3.99
44.32
2.2%
10.6%
YPA Thailand
208
310
(28.97)
(38.25)
-13.9%
-12.3%
Pack Delta*
1,037
95.13
9.2%
Yung Hsin
837
1,004
3.98
8.87
0.5%
0.9%
New geographies: Mixed bag; may exit South Korea if sales dont pick up
The traction in new geographies has been mixed. As per the management, there is good pickup in Indonesia and Malaysia. However, demand in China (the largest Industrial packaging
market in Asia) has been low due to slowdown in the Chinese economy. Also, competition in
China is more than in other Asian countries as all the big packaging companies are present in
China. Further, cultural differences between India and China are hampering Times marketing
efforts. The company is also finding it difficult to ramp up utilisation levels in South Korea.
The new geographies did not contribute significantly to revenues in FY13 as most of them
have been commissioned recently; the blended utilisation rate was 11% for polymer drums
facilities and 7% for IBC facilities. We expect the utilisation rates to gradually increase in
Indonesia and Malaysia. However, we remain cautious of Times progress in China, Korea,
Vietnam and Egypt. The management plans to continue its operations in China as it is the
largest chemical manufacturing country in Asia and, hence, has good potential. It may exit
South Korea if sales do not pick up in a few months. The company has consciously made low
initial investments of US$5-6 mn each in the overseas facilities to test the markets the land
and building are on lease and the machinery is movable. Hence, we do not expect significant
losses if the company exits a geography; however, the same is a key monitorable.
Strategic vendor status with chemical MNCs to aid sales growth: Time has been given
the strategic vendor status by chemical MNCs including BASF, Clariant Chemicals, Dow
Chemicals and Huntsman. The company has received this status due to consistent quality
and timely services. By virtue of this status, Time would now be able to supply packaging
materials to all the global locations of these chemical companies. Since these companies are
present in Asia and the Middle East, in one or more geographies where Time has set up
manufacturing facilities, we believe that this status is likely to aid sales growth in new
geographies.
Table 4: Presence of global chemical companies in Asia and the Middle East
Revenue contribution from
19%
8%*
NA
NA
Dow Chemicals
18%
NA
Clariant Chemicals
23%
9%
BASF
Huntsman
Penetration of polymer drums in Asia (excluding India) is 6%, hence there is a large
untapped market
Asia is becoming the hub of chemical production due to cost advantages it currently
accounts for over 50% of global chemical sales. Since the chemical industry is the
primary consumer of industrial packaging products, there is good demand for industrial
packaging in Asia
CRISIL IERIndependentEquityResearch
The large packaging MNCs Mauser, Grief and Shutz do not have significant
presence in Asia (except in China), hence Time can benefit from first-mover advantage in
most of these geographies
Handling conditions in Asia are similar to that in India where Time has successfully
converted metal drum users into polymer drums
The GDP growth of most of these countries is expected to improve over 2013-15 as per
the International Monetary Fund (IMF), hence the demand for industrial packaging
products is expected to be buoyant.
Company
Plant location
China, India, Israel, Jordan, Kuwait, Malaysia,
Grief
Mauser
Shutz
2010
2011
2012
2013
2014
2015
Bahrain
China
Egypt
India
Indonesia
Korea
Malaysia
Saudi Arabia
Taiwan Province of
China
4.7
10.4
5.1
11.2
6.2
6.3
7.2
7.4
2.1
9.3
1.8
7.7
6.5
3.6
5.1
8.5
3.9
7.8
2.2
4.0
6.2
2.0
5.6
6.8
4.2
8.0
2.0
5.7
6.3
2.8
5.1
4.4
3.3
8.2
3.3
6.2
6.4
3.9
5.2
4.2
3.6
8.5
5.5
6.6
6.4
4.0
5.2
4.4
10.8
4.1
1.3
3.0
3.9
4.4
7.8
0.1
6.4
5.9
4.2
4.0
Thailand
Source: Company websites
Source: IMF
10
orders. In FY13, HDPE pipes revenues grew by 34% y-o-y. Also, the company secured an
order worth 1.2 bn from the Madhya Pradesh government for supply of 2,000 prefabricated
shelters executable over FY13-15. We expect the HDPE pipes business to grow at 10-12%
over the next two years. However, Time is expected to go slow on the prefabricated shelters
business as the EBITDA margin in this business is 10-12% and the debtor days are high.
Hence, we have not factored in any additional pre-fabricated structure orders for FY13-15.
11
CRISIL IERIndependentEquityResearch
product. Time received PESO approval for its India facility in Q4FY13. While a majority of the
domestic LPG market is serviced by the public oil marketing companies (OMCs) viz. IOC,
BPCL and HPCL, getting the orders from these companies typically takes time. Hence, Time
initially plans to focus on the private gas distributors (non-subsidised market) in India. It has
50,000 cylinders
already received a letter of intent (LOI) for purchase of 50,000 cylinders from Reliance Gas,
which is in the process of getting an approval from PESO for using these cylinders. The
company has also approached various other private gas distributors such as Aegis Gas, Total
Gas, etc. While the Indian regulator approving the use of composite cylinders is a positive for
Time, we believe that the adoption of this technology by the public OMCs, which account for
majority of the market, is still uncertain. Hence, we do not expect significant revenue
contribution from this segment in the near term.
Time does not have any major capex planned over the next two-three years as it now wants to
focus on improving the utilisation of existing assets. The management has indicated that the
capex over the next three years would be mainly for maintenance, new product development
and debottlenecking of capacities. However, we expect EBITDA margin to decline over the
next two years as the company is unable to pass on the increase in raw material prices.
Hence, despite an improvement in utilisation levels and decline in capex, we do not expect
any significant improvement in Times return ratios.
( mn)
20.0
3,000
18.0
16.0
2,500
17.5
17.1
17.1
16.8
14.0
2,000
13.8
12.2
12.5
12.0
10.0
1,500
1,000
13.3
1,942
2,219
6.0
1,894
500
11.8
9.9
8.0
2,423
13.8
12.4
1,000
1,250
4.0
2.0
FY10
FY11
FY12
Capex
12
FY13
FY14E
FY15E
0.0
FY10
FY11
FY12
RoE
FY13
FY14E
RoCE
FY15E
Key Risks
Depreciation of the rupee vs US$ may suppress margins
The rupee has depreciated by ~15% YTD in CY13 vs the US$. This has led to an increase in
Times raw material costs cost of both imports as well as locally-procured raw materials has
increased as there is parity between landed cost of imports and local raw material prices for
polymers. Historically, Time has been able to pass on the price increase with a lag by virtue of
its dominant position in the domestic market. However, the company is now finding it difficult
to pass on the increase as demand is weak. As a result, margins have been under pressure
and may be squeezed further in case of further rupee depreciation.
improvement in global demand and the companys marketing efforts in these geographies.
However, delayed recovery in global economies is likely to impact the offtake from Times
facilities and, hence, its future business prospects.
13
CRISIL IERIndependentEquityResearch
Financial Outlook
Revenues to grow at 18% CAGR over FY13-15
We expect revenues to grow to 24.6 bn in FY15 at a two-year CAGR of ~18%. Improvement
in revenues from international markets (as Times penetration in these markets increases) and
sustained growth in the domestic industrial packaging market are expected to boost overall
revenue growth.
19.9%
17.6%
20,000
15,000
20.3%
15.3%
20%
15%
16.6%
10,000
10%
5,000
5%
7,834
10,003
12,591
15,095
17,757
21,369
24,639
FY09
FY10
FY11
FY12
FY13
FY14E
FY15E
0.0%
2.0%
3.0%
3.6%
23.5%
80%
23.0%
70%
2.4%
10.4%
60%
8.9%
2.5%
8.2%
9.4%
2.2%
7.2%
8.8%
1.8%
6.3%
8.0%
19.0%
1.5%
6.3%
8.3%
1.8%
16.7%
1.6%
8.0%
10.3%
2.7%
19.9%
17.7%
1.5%
7.1%
10.0%
17.4%
1.3%
6.5%
9.6%
58.2%
60.1%
58.3%
59.0%
62.0%
61.5%
61.0%
61.6%
FY15E
25%
0.0%
20.1%
FY14E
25,000
0.0%
90%
FY13
25.9%
100%
FY12
30%
FY11
27.7%
FY10
( mn)
30,000
FY09
FY08
50%
40%
30%
20%
10%
0%
0%
Revenue
Industrial Packaging
Auto Components
Infrastructure Products
New products
25%
19.9%
domestic business
19.5%
20%
18.8%
16.2%
16.4%
15%
14.2%
14.5%
FY14E
FY15E
10%
5%
0%
FY09
FY10
FY11
FY12
EBITDA margin
14
FY13
decline in EBITDA margin. Also, depreciation is expected to increase by 26% y-o-y due to full
year operations of new international capacities and interest cost is expected to increase by
8.3% due to increase in borrowing. Adjusted PAT is expected to increase by 32% in FY15.
Hence over FY13-15, adjusted PAT is forecast to grow at 8% CAGR. Adjusted PAT margin is
expected to decline by 90 bps over FY13-15 to 4.9%. Further, we expect Times RoE and
RoCE to remain supressed due to lower profitability.
( mn)
1,400
20%
8.8%
9.1%
10%
8.6%
9%
1,200
8%
1,000
5.9%
7%
5.8%
4.9%
800
4.3%
5%
600
400
200
690
909
1,077
898
1,035
909
1,201
FY09
FY10
FY11
FY12
Adjusted PAT
FY13
FY14E
6%
FY15E
18.2%
18%
16%
14%
17.1%
17.1%
16.8%
15.3%
13.3%
13.8%
12.2%
12.5%
13.8%
12.4%
12%
10%
4%
8%
3%
6%
2%
4%
1%
2%
0%
0%
11.8%
9.9%
FY09
17.5%
FY10
FY11
FY12
RoE
FY13
FY14E
FY15E
RoCE
15
CRISIL IERIndependentEquityResearch
(x)
1.0
0.9
7.0
5.8
5.9
6.0
5.2
0.8
5.0
0.7
0.6
3.6
3.3
0.5
3.6
3.2
4.0
3.0
0.4
0.3
2.0
0.2
0.1
1.0
0.6
0.7
0.8
0.9
0.9
0.8
0.8
FY09
FY10
FY11
FY12
FY13
FY14E
FY15E
0.0
0.0
Net debt:equity
16
Management Overview
CRISIL's fundamental grading methodology includes a broad assessment of management
quality, apart from other key factors such as industry and business prospects, and financial
performance.
managing director, who has more than three decades of experience in the industry. Mr Jain is
supported by three promoter directors - Mr Bharat Vageria (Director Finance), Mr Raghupathy
Thyagarajan (Director Marketing) and Mr Naveen Jain (Director Technical). The top
management is supported by a professional second line of management.
17
CRISIL IERIndependentEquityResearch
Corporate Governance
CRISILs fundamental grading methodology includes a broad assessment of corporate
governance and management quality, apart from other key factors such as industry and
business prospects, and financial performance. In this context, CRISIL Research analyses the
shareholding structure, board composition, typical board processes, disclosure standards and
related-party transactions. Any qualifications by regulators or auditors also serve as useful
inputs while assessing a companys corporate governance.
Overall, Times corporate governance is good supported by an independent board and good
board practices.
18
Corporate governance
practices are good
Valuation
Grade: 5/5
We continue to use the discounted cash flow method to value Time. We revise the fair value
to 47 per share from 54 as we have increased the cost of equity by 100 bps to 17.4% due
54
to increase in risks associated with the current macro-economic situation. This fair value
implies P/E multiples of 10.9x FY14E EPS and 8.2x FY15E EPS. Based on the current market
price of 29, the valuation grade is 5/5.
We have assumed a terminal growth rate of 3% beyond the explicit forecast period
WACC computation
FY14-22
Terminal value
17.4%
17.4%
7.9%
7.9%
Debt : Equity
0.49
0.45
12.7%
13.1%
Cost of equity
WACC
Terminal growth rate
3.0%
Sensitivity analysis
Terminal WACC
2.0%
3.0%
4.0%
5.0%
11.1%
54
62
71
83
99
12.1%
45
51
58
66
78
13.1%
37
42
47
54
62
14.1%
31
35
39
44
50
15.1%
26
29
32
36
41
Terminal WACC
13.0%
14.0%
15.0%
16.0%
11.1%
52
61
71
81
91
12.1%
41
49
58
66
74
13.1%
33
40
47
54
61
14.1%
27
33
39
45
51
15.1%
22
27
32
37
43
19
CRISIL IERIndependentEquityResearch
()
( mn)
80
30,000
70
25,000
60
20,000
50
40
15,000
30
10,000
20
5,000
10
Time
10x
6x
12x
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Jul-13
Sep-13
May-13
Jan-13
Mar-13
Nov-12
Jul-12
Sep-12
May-12
Jan-12
Mar-12
Jul-11
Sep-11
Nov-11
May-11
Jan-11
Mar-11
Nov-10
Jul-10
Sep-10
May-10
Jan-10
Mar-10
8x
14x
EV
5x
P/E movement
30%
(Times)
20%
18
16
14
10%
0%
7x
12
10
-10%
-20%
8x
+1 std dev
8
6
4
2
0
('000)
80
8,000
70
7,000
60
6,000
50
5,000
40
4,000
30
3,000
20
2,000
10
1,000
Aug-13
Jun-13
May-13
Jan-13
Mar-13
Sep-12
Nov-12
Aug-12
Jun-12
Apr-12
Mar-12
Jan-12
Nov-11
Sep-11
Jun-11
Aug-11
Apr-11
Feb-11
Time
Median PE
Jul-13
Sep-13
May-13
Nov-12
Jul-12
Sep-12
May-12
Jan-12
Mar-12
Nov-11
Sep-11
May-11
Jul-11
Jan-11
Jan-11
Mar-11
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Premium/Discount to NIFTY
Median premium/discount to NIFTY
Jul-10
-1 std dev
Jan-10
Mar-10
-60%
Sep-10
Nov-10
-50%
May-10
-40%
Jan-13
Mar-13
-30%
20
6x
Peer comparison
P/E (x)
M Cap.
P/B (x)
EV/EBITDA (x)
RoE (%)
FY13
FY14E
FY15E
FY13
FY14E
FY15E
FY13
FY14E
FY15E
FY13
FY14E
FY15E
11.8
Time
6,293
6.1
6.9
5.2
0.7
0.7
0.6
5.0
5.0
4.3
12.5
9.9
8,929
5.9
NA
NA
1.1
NA
NA
2.6
NA
NA
20.5
NA
NA
7,201
4.4
2.2
1.9
0.5
0.2
0.2
5.2
3.9
9.5
11.2
9.9
10.2
40,179
13.8
12.0
9.3
4.6
3.7
3.0
8.5
7.3
5.8
36.8
34.0
35.2
Time does not have any like-to-like listed peers. In the domestic market, the second largest
industrial packaging player is Balmer Lawrie Van Leer Company, which is a privately held firm.
We have chosen the above peers as they are either present in the industrial packaging
segment (such as Balmer Lawrie & Co. which manufactures steel drums) or are plastic
processors with a diversified portfolio.
CMP
Date
Nature of report
Fundamental
grade
Fair value
grade
04-Jan-11
Initiating coverage
4/5
71
4/5
58
18-Feb-11
4/5
71
5/5
54
08-Jun-11
4/5
71
4/5
62
23-Aug-11
4/5
71
3/5
69
29-Nov-11
4/5
62
5/5
49
05-Mar-12
4/5
62
4/5
54
07-Aug-12
Detailed report
4/5
55
5/5
44
22-Aug-12
4/5
55
5/5
42
28-Nov-12
4/5
55
4/5
47
27-Feb-13
4/5
63
5/5
44
04-Jun-13
4/5
63
5/5
40
19-Aug-13
4/5
54
5/5
33
17-Sep-13
Detailed report
4/5
47
5/5
29
21
CRISIL IERIndependentEquityResearch
Company Overview
Incorporated in 1989, Time commenced its operations as a small scale unit in Daman in 1991;
it started with the manufacture of polymer drums and is now a market leader in the industrial
packaging segment. It has grown through organic and inorganic means. It has also
established a diverse product portfolio by continuously adding products. It currently has 46
manufacturing facilities across 13 countries - India, the Czech Republic, Poland, Romania,
Egypt, UAE, Bahrain, Thailand, Indonesia, China, South Korea, Taiwan, Vietnam and
Malaysia.
It manufactures its products under five broad segments- industrial packaging, infrastructure
products, automotive products, lifestyle products and healthcare products. Of these, industrial
packaging is the largest, contributing 63% of revenues followed by infrastructure (17%
contribution) and lifestyle (10% contribution).
Times acquisitions
Cost of acquisition
Year
Company acquired
( mn)
Times share
Jul-06
TPL Plastech
322.58
75%
Nov-06
Pack Delta
159.73
49%
Nov-07
Ned Energy
482.89
71%
Apr-08
Gulf Power
225.00
100%
Nov-09
Komposite Praha
161.04
99%
Nov-09
YPA Thailand
70.80
100%
Oct-10
Power Build
51.60
60%
Oct-10
160.65
100%
Dec-10
225.00
90%
Milestones
1992
1993
1998
Lifestyle products launched - entrance matting (DuroTurf & Meadowz) based on special product technology
2000
2004
2005
2006
2007
2008
22
2009
Expanded battery operations in India, new facility at Panoli (Gujarat) through NED Energy Ltd
Acquired composite gas cylinder business in the Czech Republic
Acquired competing industrial packaging business in Thailand, YPA (Thailand) Ltd
Signed JV with Schoeller Arca Systems, the Netherland for launch of material handling products (MHP) and material handling
solutions in India
2010
2011
Set up greenfield packaging projects in Tianjin (North China), Guangzhou (South China), Bahrain (Saudi Arabia), Jakarta
(Indonesia), Busan (South Korea), Attaka (Eygpt)
Expanded infrastructure products manufacturing facilities in Kolkata and Pantnagar
Set up greenfield industrial packaging projects in Hyderabad, Daman and Bhuj
2012
2013
23
CRISIL IERIndependentEquityResearch
Annexure: Financials
Income statement
( m n)
Operating incom e
EBITDA
EBITDA m argin
Depreciation
EBIT
Interest
Operating PBT
Other income
Exceptional inc/(exp)
PBT
Tax provision
Minority interest
PAT (Reported)
Less: Exceptionals
Adjusted PAT
Balance Sheet
FY11
12,591
2,364
18.8%
440
1,924
451
1,473
19
54
1,545
356
59
1,131
54
1,077
FY12
15,095
2,444
16.2%
556
1,888
685
1,203
26
0
1,230
308
23
898
0
898
FY13
17,757
2,920
16.4%
675
2,245
886
1,359
49
(9)
1,400
341
33
1,026
(9)
1,035
FY14E
21,369
3,029
14.2%
849
2,180
960
1,220
27
1,247
299
39
909
909
FY15E
24,639
3,567
14.5%
961
2,606
991
1,615
27
1,642
394
47
1,201
1,201
4%
FY11
FY12
FY13
FY14E
FY15E
Grow th
Operating income (%)
EBITDA (%)
Adj PAT (%)
Adj EPS (%)
25.9
21.1
18.5
18.5
19.9
3.4
(16.6)
(17.0)
17.6
19.5
15.2
15.2
20.3
3.7
(12.2)
(12.2)
15.3
17.7
32.1
32.1
Profitability
EBITDA margin (%)
Adj PAT Margin (%)
RoE (%)
RoCE (%)
RoIC (%)
18.8
8.6
17.1
16.8
14.6
16.2
5.9
12.2
13.3
12.0
16.4
5.8
12.5
13.8
12.8
14.2
4.3
9.9
12.4
11.3
14.5
4.9
11.8
13.8
12.3
Valuations
Price-earnings (x)
Price-book (x)
EV/EBITDA (x)
EV/Sales (x)
Dividend payout ratio (%)
Dividend yield (%)
5.8
0.9
5.1
1.0
10.4
1.9
7.0
0.8
5.7
0.9
11.0
1.6
6.1
0.7
5.0
0.8
9.6
1.6
6.9
0.7
5.0
0.7
10.8
1.6
5.2
0.6
4.3
0.6
9.8
1.9
B/S ratios
Inventory days
Creditors days
Debtor days
Working capital days
Gross asset turnover (x)
Net asset turnover (x)
Sales/operating assets (x)
Current ratio (x)
Debt-equity (x)
Net debt/equity (x)
Interest coverage
97
68
67
108
1.6
2.3
2.0
3.3
0.9
0.8
5.2
93
71
72
110
1.6
2.2
1.9
3.1
1.0
0.9
3.6
93
70
68
106
1.5
2.2
1.8
2.9
0.9
0.9
3.3
90
70
69
101
1.6
2.3
2.1
2.8
0.9
0.8
3.2
90
70
69
103
1.6
2.5
2.3
2.8
0.8
0.8
3.6
FY11
5.1
7.2
32.7
0.6
209
FY12
4.3
6.9
37.4
0.5
210
FY13
4.9
8.1
41.7
0.5
210
FY14E
4.3
8.4
45.6
0.5
210
FY15E
5.7
10.3
50.9
0.6
210
Ratios
Per share
Adj EPS ()
CEPS
Book value
Dividend ()
Actual o/s shares (mn)
24
( m n)
Liabilities
Equity share capital
Reserves
Minorities
Net w orth
Convertible debt
Other debt
Total debt
Deferred tax liability (net)
Total liabilities
Assets
Net fixed assets
Capital WIP
Total fixed assets
Investm ents
Current assets
Inventory
Sundry debtors
Loans and advances
Cash & bank balance
Marketable securities
Total current assets
Total current liabilities
Net current assets
Intangibles/Misc. expenditure
Total assets
FY11
FY12
FY13
FY14E
FY15E
209
6,230
414
6,853
5,891
5,891
287
13,031
210
7,081
569
7,861
7,685
7,685
339
15,885
210
7,976
569
8,755
8,246
8,246
369
17,370
210
8,771
608
9,589
8,646
8,646
369
18,604
210
9,835
655
10,700
8,796
8,796
369
19,865
5,951
1,191
7,143
-
7,650
1,349
8,998
-
8,753
1,475
10,228
-
9,654
725
10,379
-
10,193
475
10,668
-
2,589
2,503
1,071
537
6,700
2,061
4,639
1,249
13,031
3,082
3,208
1,376
664
3
8,334
2,708
5,626
1,260
15,885
3,617
3,629
1,289
535
4
9,073
3,181
5,892
1,249
17,370
4,332
4,367
1,710
515
4
10,927
3,951
6,976
1,249
18,604
4,995
5,035
1,971
483
4
12,488
4,540
7,948
1,249
19,865
Cash flow
( m n)
Pre-tax profit
Total tax paid
Depreciation
Working capital changes
Net cash from operations
Cash from investm ents
Capital expenditure
Investments and others
Net cash from investm ents
Cash from financing
Equity raised/(repaid)
Debt raised/(repaid)
Dividend (incl. tax)
Others (incl extraordinaries)
Net cash from financing
Change in cash position
Closing cash
FY11
1,492
(280)
440
(764)
887
FY12
1,229
(256)
556
(858)
672
FY13
1,408
(311)
675
(394)
1,378
FY14E
1,247
(299)
849
(1,104)
693
FY15E
1,642
(394)
961
(1,004)
1,205
(2,219)
(2,219)
(2,423)
(3)
(2,425)
(1,894)
(1)
(1,895)
(1,000)
(1,000)
(1,250)
(1,250)
0
1,493
(136)
81
1,437
105
537
15
1,795
(114)
186
1,881
127
664
560
(115)
(58)
388
(129)
535
400
(114)
(0)
286
(21)
515
150
(137)
(0)
13
(32)
483
Q1FY13
4,038
-6%
663
13%
16.4%
234
234
27%
5.8%
1.1
Q2FY13
4,319
7%
740
12%
17.1%
267
267
14%
6.2%
1.3
Q3FY13
4,411
2%
772
4%
17.5%
291
291
9%
6.6%
1.4
Q4FY13
5,206
18%
741
-4%
14.2%
242
242
-17%
4.6%
1.2
Q1FY14
4,892
-6%
695
-6%
14.2%
190
190
-21%
3.9%
0.9
Quarterly financials
( m n)
Net Sales
Change (q-o-q)
EBITDA
Change (q-o-q)
EBITDA m argin
PAT
Adj PAT
Change (q-o-q)
Adj PAT m argin
Adj EPS
Focus Charts
Revenues to grow at 18% CAGR over FY13-15
( mn)
27.7%
30,000
30%
25.9%
25,000
25%
19.9%
15,000
3,500
19.9%
19.5%
18.8%
3,000
20.3%
17.6%
20,000
(%)
25%
4,000
15.3%
20%
15%
16.6%
10,000
10%
5,000
5%
20%
16.2%
2,500
14.2%
16.4%
14.5%
15%
2,000
10%
1,500
1,000
7,834
10,003
12,591
15,095
17,757
21,369
24,639
0%
FY09
FY10
FY11
FY12
Revenue
FY13
FY14E
500
5%
1,559
1,952
2,364
2,444
2,920
3,029
3,567
FY09
FY10
FY11
FY12
FY13
FY14E
FY15E
FY15E
0%
EBITDA
( mn)
1,400
20%
8.8%
9.1%
10%
8.6%
9%
1,200
8%
1,000
5.9%
7%
5.8%
4.9%
800
4.3%
5%
600
400
200
690
909
1,077
898
1,035
909
1,201
FY09
FY10
FY11
FY12
Adjusted PAT
FY13
6%
FY14E
16%
14%
17.5%
17.1%
17.1%
16.8%
15.3%
13.3%
13.8%
12.2%
12.5%
10%
8%
3%
6%
2%
4%
1%
2%
0%
0%
FY09
FY10
FY11
FY12
FY13
RoE
140
90%
120
80%
70%
FY15E
18.7%
19.1%
19.1%
18.7%
8.7%
8.7%
8.7%
8.7%
10.8%
10.4%
10.4%
10.8%
61.9%
61.9%
61.9%
61.9%
Sep-12
Dec-12
Mar-13
60%
80
FY14E
RoCE
160
11.8%
9.9%
100
13.8%
12.4%
12%
4%
FY15E
18.2%
18%
50%
60
40%
NIFTY
Sep-13
Jun-13
Mar-13
Sep-12
Dec-12
Jun-12
Mar-12
Sep-11
Time
Dec-11
Jun-11
Mar-11
Dec-10
10%
Oct-10
Jul-10
20%
Apr-10
30%
20
Jan-10
40
0%
Promoter
FII
DII
Jun-13
Others
-Indexed to 100
Source: Company, CRISIL Research
25
CRISIL IERIndependentEquityResearch
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Bengaluru - 560 042, India
Phone: +91 80 2558 0899
+91 80 2559 4802
Fax: +91 80 2559 4801
Kolkata
Horizon, Block 'B', 4th Floor
57 Chowringhee Road
Kolkata - 700 071, India
Phone: +91 33 2289 1949/50
Fax: +91 33 2283 0597
Chennai
Thapar House,
43/44, Montieth Road, Egmore,
Chennai - 600 008, India
Phone: +91 44 2854 6205/06
+91 44 2854 6093
Fax: +91 44 2854 7531
Pune
1187/17, Ghole Road,
Shivaji Nagar,
Pune - 411 005, India
Phone: +91 20 2553 9064/67
Fax: +91 20 4018 1930
Gurgaon
Plot No. 46
Sector 44
Opp. PF Office
Gurgaon - 122 003, India
Phone: +91 124 6722 000
CRISIL Limited
CRISIL House, Central Avenue,
Hiranandani Business Park, Powai, Mumbai 400076. India
Phone: +91 22 3342 3000 | Fax: +91 22 3342 8088
www.crisil.com
CRISIL Ltd is a Standard & Poor's company