DIALWEALTH DIWALI PICK

DATE :- 27/10/23

1st PICK

NAME :- TIME TECHNO

CMP :- 153.5

BUYING RANGE 150-155

FIRST TARGET :- 300+

CONVICTION :- VERY HIGH

TIME FRAME :-6-9 MONTHS

VALUATION ARE VERY REASONABLE AND DOWNSIDE IS VERY LIMITED.

Incorporated in 1992, Time Technoplast Ltd is a leading global industrial packaging company. The
company manufacturers polymer and composite products for diversified industries which include
chemical, pharma, FMCG, paint, auto, oil & gas,lifestyle, infrastructure, construction, water etc. It is a
multinational conglomerate with manufacturing presence in 11 countries including India. The
company enjoys dominant position with 60% market share in domestic industrial packaging.Globally,
the company is the largest manufacturer of large size plastic drums, the second-largest manufacturer
of composite cylinders, and third largest for intermediate bulk container manufacturer. The
company’s domestic and export revenue constitute 65% and 35% respectively as on FY23.

Big trigger :-

The company is in advance stage of selling majority stake (i.e. 75-80%) across all its three overseas
location (US, South East Asia and Middle East) to third party and expects to utilize sale proceeds to
reduce debt. This deal is likely to happen before financial year end. One can expect sizeable savings
in interest from next year itself.

Another big trigger is the green hydrogen opportunity :- The company is undergoing process testing
of its type VI carbon wrapped cylinder under various bar pressure i.e. 350/500/700 and management
expects to receive PESO approval in next 6 months.
It is only company in India to produce Type IV CNG composite cylinders used for CNG cascades and
on-board application in automobiles. It is also first company to launch Type-IV composite cylinders
for LPG in India, and is the second largest producer of composite cylinders worldwide. The type-IV
LPG cylinders have various advantages like 1) 50% lighter than metal 2) explosion proof 3) non
corrosive and 4) low maintenance cost; however, it is costlier by 25% than metal. It sells LPG
composite cylinders under “Litesafe”, ranging from 2-22kgs. The product has received approval in
over 48 countries including India. Domestically, LPG is the preferred cooking fuel which is filled under
metal cylinder for 200mn households and every year 8-10% of metal cylinder is replaced due to
ageing factor, which leads to high replacement demand. During March 2022, the company received
one of the largest order from public sector OMC i.e. IOCL for supplying 7.5lac units of composite
cylinder of 10kg for value of Rs 1.8bn, executable within 12 months. The company has received
repeat order of similar quantity from IOCL and this is executable current year.The company is in
constant touch with other two OMCs i.e. BPCL and HPCL for receiving approval of LPG composite
cylinder.
CNG cascade – big opportunity to be unfold along with green hydrogen opportunity :-

The company started CNG cascade business in FY21 after receiving the approval from PESO and third
party (Bureau Veritas – Europe) for type-IV fully wrapped carbon fibre cylinders for CNG cascade
applications. Subsequently it also received approval from PESO and Bureau Veritas under ISO: 11439-
2013 for on-board (vehicle) applications in May 2021. The type IV CNG cylinders for cascade
application is 70% lighter than type I steel cylinders and reduce per KG CNG transportation cost by
almost 50% and carries 220% more Gas. For onboard application, at prevailing market price, the
usage of CNG reduces fuel costs by 20-30% vs other gasoline engines. Further, each CNG station
requires 2 CNG cascade which itself entails a huge market potential in coming years.

Valuations :-

At current market price of 153 stock is trading at 3400 cr market cap and expected pat of 300 crore in
current year stock is trading at 11 PE which is very reasonable given the opportunity size company
has. Investors can expect very good returns with limited downside risk.

If you have any doubt regarding any of our picks feel free to contact us.

@Dialwealth