time technoplast
TRANSCRIPT
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Time Technoplast
Leading through
Innovations & Technology
Blog: http://dharmawat.blogspot.com/
Niteen S Dharmawat
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IMPORTANT DISCLAIMER: This presentation is prepared solely to provide information about this company and take feedback from the readers. This presentation is NOT meant for equity investment. It should NOT be construed as an investment advice for buy/sell/hold or anyother form of recommendation. This presentation does not recommend any price or price target for the company discussed. Investment in equity shares has its own risks. The information contained herein is based on my study and upon sources that I consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and not intended for any investment decisions. I am not responsible for any profit or loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the discussion thread above/anywhere in communication. It is safe to assume that I, my family, friends have vested interest in any of the companies/stocks discussed/presented here. Please do your due diligence and take the help of a qualified advisor/registered research analyst before you take any financial decision. I am neither of these.
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“If you are shopping for common stocks,
choose them the way you would buy groceries,
not the way you would buy perfume.”
Benjamin Graham(Father of value investing)
Blog: http://dharmawat.blogspot.com/
About Time Technoplast
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Background…
A multinational conglomerate with operations in Bahrain, Belgium, China, Egypt, Indonesia, India, Korea, Malaysia, Poland, Romania, Singapore, Sharjah, Taiwan, Thailand, Vietnam is a leading manufacturer of polymer products
One of the two largest producer of polymer drums worldwide
By far the largest market share of polymer drums in India
Technology driven innovative products
28 manufacturing units & 10 regional and marketing offices
Over 500 institutional clients and distribution / dealer network spread over 345 cities and towns
Blog: http://dharmawat.blogspot.com/
Financials
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Summary…
CMP: INR 50 v/s Book Value 55
Revenue: INR 2472 Cr, NP: INR 138 Cr (TTM)
Market Cap: ~INR 1040 Crs
Debt: INR ~800Crore (area of concern but debt is reducing now)
Strong Operating Cash Flow
Company is currently running at low utilization levels
Return on Equity: 5Yrs 13%, 3Yrs 12%, Last Yr 11%
Capex of 900Crore in last 5 years. Capex cycle ending and free cash flow expected to improve in the future
Dividend yield: 1.01% (paying dividend since listing year)
Blog: http://dharmawat.blogspot.com/
Financials
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Summary…
Initial Public Offering (IPO) in 2007
IPO Oversubscribed 49.55 times (Retail 12, HNIs 71 and QIP 69 times)
IPO Price 31.5. Listing day Price: 49.9. (adjusted for split)
Ever high price 100+ in 2007 (adjusted for split)
V/S
CMP 50
Since IPO, revenue increased 6 times and NP by 3.35 times
High promoters’ shareholding (PSH) at ~58.5%.
Unpledged 45% and pledged getting released. After removing pledged from PSH, their
holding is comfortably high
Worldwide business activities are conducted through representation in more than 130
countries.
Institution holding around 30%
HDFC holding 8.65% shares for a long time
FIIs holding 20.76%
Public holding around 12%
Blog: http://dharmawat.blogspot.com/
Time Technoplast
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In INR Crores.
Net Profit (NP) V/S Operating Cash Flow (OCF)…
Remember Opto Circuit & Arshiya Int., investors lost everything – why?
OCF 119.48 -28.05 -9.38 13.83 -10.19 -15.50
Signal
Parameter Mar 2012 Mar 2011 Mar 2010 Mar 2009 Mar 2008 Mar 2007
Net profit 47.51 24.93 15.40 18.49 12.36 3.98
Arshiya International:
CFO 126 130 178 115 40
Signal (Red)
Parameter Mar 2012 Mar 2011 Mar 2010 Mar 2009 Mar 2008
Net profit 573 368 260 209 131
Opto Circuit:
OCF 270 214 221 161 140
Signal
Parameter 2015 2014 2013 2012 2011
Net profit 110 99 103 89.7 111
Blog: http://dharmawat.blogspot.com/
Parameter Dec 2014 Sep 2014 Jun 2014 Mar 2014 Dec 2013 Sep 2013 Jun 2013 Mar 2013
UnpledgedPromoters’ SHP
48.97 50.46 48.97 46.7 40.33 40.3 45.06 46.77
Signal• Healthy promoters’ holding to 58.5%• Pledged shares getting released.
Time Technoplast
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Shareholding Pattern (SHP)…
SHP Pledged 32.13 23.87 25.36 17.97 17.47 11.01
Signal
Parameter Sep 2012 Jun 2012 Mar 2012 Dec 2011 Sep 2011 Jun 2011
SHP Unpledged 12.46 19.36 17.87 25.26 25.73 32.19
Opto Circuit: from 140 to now 25
Name of Acquirer/SellerBharat Vageria
Bharat Vageria
Bharat Vageria
Aruna Vageria
Aruna Vageria
Aruna Vageria
Arun Vageria
Aruna Vageria
Aruna Vageria
TotalReported to Exchange 29-Aug-13 22-Aug-13 3-Jun-13 3-Jun-13 3-Apr-13 25-Mar-13 5-Mar-13 6-Sep-12 5-Sep-12
Buy/Sale B B B B B B B B B
Mode of Buy/Sale Market Market Market Market Market Market Market Market Market
No. of Shares 31703 22555 11000 11162 15656 16765 16258 33127 33127 1,91,353
• Promoters increasing stakes since Sep 2012 • 2.5% stake sold in Dec’2014 QTR picked up by Morgan Stanley
Source: www.bseindia.comBlog: http://dharmawat.blogspot.com/
Time Technoplast
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More than 1% holding from Public/Institution Category…
Source: www.bseindia.com
Sl. No. More than 1% Holding % of Total Shares
1 HDFC Prudence Fund 8.65
2 American Insurance Series Fund 5.66
3 Morgan Stanley Asia 5.2
4 Gradeur Peak Fund* 4.0
5 Government Pension 1.63
6 India Business Excellence Fund 1.54
7 Others 2.75
Total 29.43
• HDFC holding consistent for last several years
* Merged for same shareholders entity
• Promoters holding=58.5%
• FIIs+DIIs+Corp >= 29.43%
• Public =< 12%
Blog: http://dharmawat.blogspot.com/
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Pick up good companies with good
managements when their share prices are at
an eight-year or 10-year low
Chandrakant Sampat(The Magician of D-street, Indian Warren Buffett.)
Price chart… Eimco Elecon
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Summary…
Stagnant during 7 years
10 times in 7 years.
HDFC entered somewhere here& continue to hold 4.79%….
More than 2.5 times in 11
months.
See Eimce Elecon PPT: http://goo.gl/FKmDcX
Source: www.bseindia.com
Now 400+dividends
Blog: http://dharmawat.blogspot.com/
Price chart… Paper Products (HPPL)
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A stagnant stock…
Stagnant during last 7 years
* adjusted for any split/bonus
Price is the closing price at the end of the year
More than 6 times in 5 years.
See Paper Products PPT: http://goo.gl/9NeGKj
More than 3 times in 14 months.
Source: www.bseindia.com
Now 302+dividends
Blog: http://dharmawat.blogspot.com/
Price chart… Time Tech
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A stagnant stock…
Stagnant during last 7 years
* adjusted for any split/bonus
Price is the closing price at the end of the year
Source: www.bseindia.com
HDFC bought 8.65% here and continue to hold.
Blog: http://dharmawat.blogspot.com/
Key Competitors
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Business Division Competitor
Industrial packaging Balmer Lawrie, Sintex Industries
Infrastructure products
Supreme Industries, Finolex Industries, Astral Poly Technik, Jain Irrigation, Tulsi Extrusions, KisanGroup, Nandi Group, Rungta Irrigation, Nilkamal, Wim Plast, National Plastics, Prima Plastics
Lifestyle products Unorganized segment with large number of players
Auto ComponentsInnovative products and as such no majorcompetitor.
Material handling products (New products)
Time entered into a JV with Schoeller Plast Industries in India. Schoeller is the largest player in material handling.
Composite cylinders (New products)
Until recently only two players in the world who have technology to manufacture; Supreme Industries launched Composite Cylinders recently.
Blog: http://dharmawat.blogspot.com/
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“Go for a business that any idiot can run -
because sooner or later, any idiot probably is
going to run it.”
Peter Lynch(Legendary Investor)
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Product PortfolioA multinational Technology driven company…
Source: company websiteBlog: http://dharmawat.blogspot.com/
Product Portfolio
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A multinational Technology driven company…
Source: company websiteBlog: http://dharmawat.blogspot.com/
Industrial Packaging Products
18Source: company website
• Largest division with ~60% revenue
Blog: http://dharmawat.blogspot.com/
Technical & Lifestyle Application Products
19Source: company websiteBlog: http://dharmawat.blogspot.com/
Infra Products
20Source: company websiteBlog: http://dharmawat.blogspot.com/
Composite Gas Cylinders
21Source: company website
Must watch video here: http://www.litesafecylinders.com/
Blog: http://dharmawat.blogspot.com/
Material Handling Solutions
22Source: company websiteBlog: http://dharmawat.blogspot.com/
Revenue Breakup
23Source: company websiteBlog: http://dharmawat.blogspot.com/
Opportunities - Industrial Packaging
24Source: company websiteBlog: http://dharmawat.blogspot.com/
Opportunities – Non Packaging
25Source: company websiteBlog: http://dharmawat.blogspot.com/
Key Customers
26Source: company websiteBlog: http://dharmawat.blogspot.com/
Global Presence
27Source: company websiteBlog: http://dharmawat.blogspot.com/
Acquisitions…
28Source: company websiteBlog: http://dharmawat.blogspot.com/
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Even the ignorant may appear very worthy,
If they keep silent before the learned.
Thiruvalluvar(A celebrated Indian poet and philosopher whose contribution to Tamil literature is
the Thirukkural, a work on ethics.)
What to expect…
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Future holds promosing…
Chemical plants moving to India/East due to various environmental concerns overseas
Value adding company hence should benefit from lower input prices (crude-petrochem)
Broad product portfolio in products which should have good demand
Capex completed
Low utilization, if managed, could trigger operational improvements
Global presence and known for quality products
LPG distribution through private sector in India
Government’s focus on sanitation, infrastructure and housing sector
Good marketing - they know how to sell their story
Blog: http://dharmawat.blogspot.com/
Risks and Mitigation
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• Debt
• Reducing debt, last year paid back
• Crude price movement
• Lower crude prices to benefit in long term, but volatility may impact margins
• Subsidiaries/JV etc. contribute to > 50% of sales but very small contribution to profit
• Closing some overseas operations which are not performing
• A bit over ambitious
• Hope they walk the talk: Stop investing now & start reaping the reward on investment
• CFO is member of the audit committee - not good governance
• Chairman of the audit committee is the Chairman of the company and is a non-executive
• Very low salary for and MD and CFO - does not appear to be correct picture - so some lack of transparency here
• Very large contingent liabilities in form of guarantees to subsidiaries & too many acquisitions in last 7 years
• Limited float in the market
Blog: http://dharmawat.blogspot.com/
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About the presenter:
Niteen is an MBA and cleared CFA Level 2, CFA Institute USA. A firm believer in long-term financial planning, and a 20 years veteran of the stock market. He also conducts free investor awareness sessions.
He likes reading books/magazines/news papers on the topics as diverse as general management, technology, investment, fiction, marketing and the Gita.
He is a person who believes in "Everything else can stop but learning".
Blog: http://dharmawat.blogspot.com/
Thank you
Email: [email protected]
Mobile: 9850571857
Blog: http://dharmawat.blogspot.com/
Twitter: @niteen_india
Slideshare: www.slideshare.net/ndharmawat/
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IMPORTANT DISCLAIMER: This presentation is prepared solely to provide information about this company and take feedback from the readers. This presentation is NOT meant for equity investment. It should NOT be construed as an investment advice for buy/sell/hold or anyother form of recommendation. This presentation does not recommend any price or price target for the company discussed. Investment in equity shares has its own risks. The information contained herein is based on my study and upon sources that I consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and not intended for any investment decisions. I am not responsible for any profit or loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the discussion thread above/anywhere in communication. It is safe to assume that I, my family, friends have vested interest in any of the companies/stocks discussed/presented here. Please do your due diligence and take the help of a qualified advisor/registered research analyst before you take any financial decision. I am neither of these.