Crisil Report Sep 2013

CRISIL IERIndependentEquityResearch
Time Technoplast Ltd
Detailed Report
Enhancing investment decisions
Explanation of CRISIL Fundamental and Valuation (CFV) matrix

The CFV Matrix (CRISIL Fundamental and Valuation Matrix) addresses the two important analysis of an investment making process Analysis
of Fundamentals (addressed through Fundamental Grade) and Analysis of Returns (Valuation Grade) The fundamental grade is assigned on a
five-point scale from grade 5 (indicating Excellent fundamentals) to grade 1 (Poor fundamentals) The valuation grade is assigned on a fivepoint scale from grade 5 (indicating strong upside from the current market price (CMP)) to grade 1 (strong downside from the CMP).
CRISIL
Fundamental Grade
Assessment
CRISIL
Valuation Grade
Assessment
5/5
Excellent fundamentals
5/5
Strong upside (>25% from CMP)
4/5
Superior fundamentals
4/5
Upside (10-25% from CMP)
3/5
Good fundamentals
3/5
Align (+-10% from CMP)
2/5
Moderate fundamentals
2/5
Downside (negative 10-25% from CMP)
1/5
Poor fundamentals
1/5
Strong downside (<-25% from CMP)
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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.
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Weathering the local headwinds
Fundamental Grade
4/5 (Superior fundamentals)
September 17, 2013
Valuation Grade
5/5 (CMP has strong upside)
Industry
Containers and packaging
Fair Value
CMP
Overseas packaging: Growth in Asia aided by strategic vendor status

In the overseas packaging business, Bahrain, Taiwan, Thailand and UAE have been driving
growth, while the facilities in other regions (China, Egypt, Indonesia, Malaysia, South Korea,
and Vietnam) are currently operating at low utilisation rates as they have been commissioned
only in the last one year. We expect the established geographies to drive Times revenues in
the near term. At the same time, the new geographies are expected to start contributing from
FY14 onwards aided by Times strategic vendor status with various global chemical
companies. However, their contribution is expected to remain small over the next two years;
the ability of the company to ramp up sales in these regions is a key monitorable.
No major capex planned over FY13-15 but low margin to keep returns suppressed
Time incurred a capex of 8.6 bn during FY10-13 mainly to set up overseas facilities, set up
composite cylinder facilities in India and Bahrain and expand domestic capacity. Its return
ratios declined over the same period due to low utilisation of international capacities. While
capex is expected to moderate over FY13-15 and utilisation of international capacities is
expected to pick up, return ratios are expected to remain low due to decline in profitability.
Valuations: Current market price has strong upside
We continue to use the discounted cash flow method to value Time and revise the fair value
to 47 per share as we have increased the cost of equity. This fair value implies P/E multiples
of 10.9x FY14E EPS and 8.2x FY15E EPS.
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
Domestic packaging: Market leader but margin under pressure

By virtue of its leadership in the domestic industrial packaging market with a 70-75% share,
Time has largely been able to pass on the increase in raw material prices to its clients in the
past. However, it was unable to pass on the recent rupee depreciation-led increase in
polymer prices completely. As domestic demand is sluggish, Time has not been able to
increase the prices significantly. We expect raw material prices to remain high and the
demand to be weak. Hence, we expect Times overall EBITDA margin to decline by 200 bps
over FY13-15 to 14.5%.
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
KEY STOCK STATISTICS

NIFTY/SENSEX
NSE/BSE ticker
Face value ( per share)
Shares outstanding (mn)
Market cap ( mn)/(US$ mn)
Enterprise value ( mn)/(US$ mn)
52-week range ()/(H/L)
Beta
Free float (%)
Avg daily volumes (30-days)
Avg daily value (30-days) ( mn)
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
PERFORMANCE VIS--VIS MARKET
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
NM: Not meaningful; CMP: Current market price
Bhaskar Bukrediwala
Source: Company, CRISIL Research estimates
Client servicing desk

+91 22 3342 3561
mohit.modi@crisil.com
kamna.motwani@crisil.com
bhaskar.bukrediwala@crisil.com
clientservicing@crisil.com
For detailed initiating coverage report please visit: www.ier.co.in

CRISIL Independent Equity Research reports are also available on Bloomberg (CRI <go>) and Thomson Reuters.
Table 1: Time Business environment
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
service offering drums,
polymer
HDPE pipes used for
Turfs and matting used Anti-spray rain flaps Composite
and
water treatment and
in households, dustbins made of polymers, material
sewage projects
and moulded furniture
barrels
containers, and intermediate

bulk
containers
These
are
(IBCs).
the
used
in
chemicals,
specialty
chemicals,
paints
FMCG industries
Geographic
Domestic
presence
India
(~75%):
and
fuel
tanks,
cylinders,
handling
de- products such as crates,
Telecom, UPS and
aeration tanks and pallets, bins, etc. and
other industrial
radiators
healthcare products such
batteries
as syringes, facemasks,
Prefabricated shelters
etc.
Pan India
Domestic (74%): Pan Domestic

India
(66%):
Pan India
Healthcare and
material handling
products are sold
International
Mainly
where
Asian
(~25%):
countries
penetration
of
International
Poland,
Thailand
(26%): International (34%):
Romania
and Poland and Romania

(Time sells only anti-
only in India
The company has
two composite
polymer drums is low - UAE,
spray rain flaps in
cylinder facilities
Thailand,
these countries)
one in India and one
Taiwan,
China,
Indonesia, Egypt, Bahrain
in Bahrain. The India
South Korea, Malaysia and
facility is likely to
Vietnam
cater to the domestic

market. The Bahrain
facility is yet to
commence
operations; it is
expected to cater to
the Middle East
countries such as
Saudi Arabia, Qatar,
the UAE, etc. apart
from Bahrain
Product /
Segment
Other products
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
market share in have a significant market which
India.
International:
Largest consists
industrial
company
The
of
large This industry is highly tanks for commercial
packaging number of organised and fragmented with many vehicles.

in
the
UAE, unorganised players
unorganised players
Taiwan and Thailand. It is a

small
makes One of the few players
industry share in this segment. polymer de-aeration with this technology
player
at
locations
since
recently
entered
markets
directly
It
with
works Material handling: Time

the has
automobile
other Industrial battery: Time Europe: Times brand manufacturers.

it
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
very unorganised players
small
competition from Chinese

imports
In
anti-spray
rain
flaps, Time has a

small market share
in
India.
Many
unorganised players
are present in this
segment
Sales growth
27%
(FY11-FY13 2-
3% (mainly due to decline
26%
33%
N.M.
12%
4%
Low revenues from this
in revenues from
yr CAGR)
industrial batteries due to

slowdown in telecom
capex)
Sales forecast
(FY13-FY15E
2-yr CAGR)
15%
~18% (the company has

won a contract worth 1.2
segment but expected to
bn for prefabricated
grow at 61% as the
shelters, executable over
composite
FY13-15 which is driving
revenues are expected
sales growth)
cylinder
to start from FY14
Product /
Segment
Demand
drivers
Growth in end-user
HDPE pipes
industries including
Investments for water
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
for housing and
products in the
marketing
drums with polymer
ductile iron pipes with
commercial
automotive
companies (OMCs)
drums in the domestic
polymers for water
properties is
sector in India
in India
Substitution of metal
market; current
penetration of polymer
drums in India is 55%
Lifestyle products
Other products
handling products)
Increase in penetration
of polymer drums in
transportation pipes
Industrial batteries
expected to lead to
more spends on
Indias directive
interiors and would
to make use of
drive demand for
anti-spray flaps
Material handling
products
turfs and matting
compulsory for
Replacement demand
for telecom batteries
Asian countries where

Time has set up
Increase in demand
Government of
Demand from the

Middle East
Increase in retail
for UPS due to high
all commercial
power deficit in India
penetration to drive
vehicles (earlier
demand for material
they were
handling
manufacturing facilities
mandatory only
for vehicles
weighing >7.5
tonnes)
Key
Domestic:
competitors
Van Leer, Sintex Industries
Balmer
Lawrie Pipes: Jain Irrigation,

Supreme Industries
industry
International: Greif, Shutz

and Mauser
Highly
fragmented Highly
with
unorganised players
Battery:
HBL
Systems,
Amara
fragmented Composite
cylinders:
many industry with many Currently

unorganised players
Power
players
only
few
have
the
technology
Raja,
to
manufacture
Exide Industries
composite
cylinders from polymers

Material handling:
Nilkamal
Ltd,
The
Supreme Industries Ltd

and
number
of
unorganised players
Key risks
Competition from the
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
Source: Company, CRISIL Research
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.
Domestic packaging: Market leader but margin under pressure

By virtue of its leadership in the domestic industrial packaging market with a 70-75% share,
Time has largely been able to pass on increase in raw material prices to its clients in the past.
However, it was unable to pass on the recent rupee depreciation-led increase in polymer
prices completely. As domestic demand is sluggish, Time has not been able to increase the
prices significantly. We expect raw material prices to remain high and the demand to be weak
with GDP growth not expected to go back to historical levels of 8-9% in the near term. As a
result, Times EBITDA margin in the domestic market is expected to remain under pressure;
we expect Times overall EBITDA margin to decline by ~200 bps over FY13-15 to 14.5%.
Cost pressure to continue - polymer prices expected to remain firm

Times key raw materials are polymer-based: high density polyethylene (HDPE) and
polypropylene (PP). The cost of procuring polymers in India has increased significantly over
the past one year due to increase in polymer prices in US$ coupled with rupee depreciation
(currently ~63/US$). In Q1FY14, HDPE prices were up 7.5% and PP prices were up 2% y-o-y
in US$ terms. In rupee terms (landed cost of imports), HDPE prices were up 13% and PP
prices were up 7% y-o-y in Q1FY14. Even the cost of locally-procured polymers has increased
as there is parity between landed cost of imports and domestic prices. Further, with increase
Landed cost of imported raw

materials has increased
sharply due to rupee
depreciation
in crude oil prices recently, polymer prices in US$ are expected to remain firm in the near
term.
Figure 1: PP price trend in rupee and US$
Figure 2: HDPE price trend in rupee and US$
(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
HDPE prices in US$
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
Note: These prices are of polypropylene homo-polymer

Source: CRISIL Research
Demand unlikely to improve significantly in the near term

Domestic demand for industrial packaging is expected to remain muted in the near term due
to slow economic growth. Indias GDP growth has slowed down over the past two years
GDP grew by 5% in FY13 vs 6.2% in FY12 and 9.3% in FY11. This has impacted growth of
the chemical and specialty chemicals industry, which is the main consumer of industrial
CRISIL Research expects
packaging. As per the Ministry of Finance, chemical and chemical products grew by less than
Indias GDP to grow by 4.8%
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.
Focusing on IBC opportunity in India

Since growth in demand for polymer drums in India is expected to remain muted in the near
term and Time already commands 70-75% market share, which limits the scope for share
expansion, it has recognised IBCs as the new area of growth in the domestic market. This
IBCs are rigid polymer

containers of 800-1,000 litres
segment, though small, is growing at a healthy pace led by demand from chemical MNCs who
capacity used for long
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.
Why are IBCs gaining acceptance in India?

Though cost of IBC is higher compared to the cost of polymer drums used to transport same
amounts, IBC has the following advantages:
Less time required for filling and handling
It can transport more material in the same space, hence freight cost is lower
Can be reused as most countries have IBC reconditioning facilities
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.
Overseas packaging: Growth in Asia aided by strategic vendor

status from chemical MNCs
Time has expanded its industrial packaging business to 10 countries, mostly in Asia. Its
operations in Bahrain, Taiwan, Thailand and UAE (referred to as established geographies
from hereon) have been driving growth, while the facilities in other regions (China, Egypt,
Indonesia, Malaysia, South Korea, and Vietnam, referred to as new geographies from hereon)
are currently operating at low utilisation rates as they have been commissioned only in the last
one year. We expect the established geographies to drive Times revenues in the near term.
At the same time, the new geographies are expected to start contributing from FY14 onwards
aided by Times strategic vendor status with various global chemical companies. However,
their contribution is expected to remain small over the next two years; the ability of the
company to ramp up sales in these regions is a key monitorable.
Established geographies: Expect robust sales growth to continue

Time set up operations in the UAE in FY07 and Bahrain in FY12 and has been able to ramp
Revenues from established
up its utilisation levels led by growth in the petrochemicals industry in the Middle East. Also, it
geographies have grown at
entered Thailand and Taiwan through acquisitions. Revenues from these geographies have
40.5% CAGR over FY11-13
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.
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.
Table 2: Details of established geographies

Year of
commencement
UAE (Sharjah)
of operations
Mode of entry
Name of the company
Market position
FY07
Greenfield capacity
Elan Incorporated FZE
Largest industrial packaging company in the UAE
Pack Delta Public Co Ltd (acquired in

Thailand
FY07
Acquisition
Largest industrial packaging player in Thailand
FY07) and YPA (Thailand) Ltd
with 60% market share
(acquired in FY10)
Bahrain*
FY12
Greenfield capacity
Gulf Powerbeat W.L.L.
NA
Taiwan
FY11
Acquisition
Yung Hsin Contain Industry Co Ltd
Holds 90% stake in the largest industrial

packaging company in Taiwan
* Bahrain packaging facility was set up in the premises of Gulf Powerbeat (industrial battery
company) which was acquired by Time in FY09
Source: Company
Table 3: Financials of established geographies

Revenue ( mn)
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%
* Pack delta was a JV with Mauser until FY12

Note: Profitability in Yun Hsin is low and YPA Thailand is currently loss-making. The company has indicated that both
these companies were acquired and it is working on increasing operating efficiencies to improve profitability.
Source: Company
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
Revenue contribution from the
Manufacturing presence at Time's locations in Asia, the
Asia Pacific in 2012
Middle East and Africa in 2012
Middle East and Africa
19%
8%*
NA
NA
Dow Chemicals
18%
NA
Clariant Chemicals
23%
9%
BASF
Huntsman
China, India, Indonesia, Malaysia, Saudi Arabia, Singapore,

South Korea, Taiwan, Thailand, the UAE, Vietnam and Egypt
China, India, Indonesia, Korea, Malaysia, Singapore,
Thailand, Taiwan, Vietnam, Egypt and the UAE
China, India, Thailand, the UAE, Saudi Arabia, Egypt
China, India, Thailand, Indonesia, Malaysia, Singapore,
Korea, Vietnam, Taiwan and Egypt
* Includes revenues from South America

Source: Company annual reports
Why has Time chosen Asia for expansion?

Time has strategically chosen Asia (all except one international facility are in Asia) for
expansion due to the following reasons:
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
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.
Table 5: Packaging MNCs not well entrenched in Asia
Company
Plant location
China, India, Israel, Jordan, Kuwait, Malaysia,
Grief
Pakistan, the Philippines, Qatar, Saudi Arabia,

UAE and Vietnam
Mauser
China, India, Malaysia and Singapore
Shutz
China, Japan, Australia, Malaysia and Korea
Table 6: Improved GDP = industrial packaging demand up

%
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
Other businesses (38% of revenues) yet to attain scale

Times other businesses lifestyle products, industrial batteries, auto components, HDPE
pipes and prefabricated shelters and material handling collectively constituted ~38% of
revenues in FY13. However, the contribution of individual businesses was less than 10%.
Further, the company does not have a strong competitive position in most of these businesses
and, hence, EBITDA margin is lower than that of the packaging business. While we expect
most of these business segments to grow in line with end-user industries, they are unlikely to
contribute significantly to overall revenues.
Lifestyle products (10% of revenues) domestic demand stable, IKEA

order to drive international sales
Revenues from lifestyle products grew at a two-year CAGR of 26% over FY11-13; while
domestic revenues grew at 13%, overseas revenues grew 5x (over a small base). The
company enjoys healthy margin in overseas locations, but domestic margins are lower due to
stiff competition from the unorganised segment.
Time has received a large matting order from IKEA in Poland which is expected to drive its
international sales; it has increased capacity by ~33% in Poland to service the IKEA order.
Further, the demand in the domestic market is stable. We expect this segment to grow at 12%
over the next two years with international sales growing faster than domestic sales, led by the
IKEA order.
10
Time has received a large

order for matting from IKEA
Industrial battery (9% of revenues) muted growth, looking to divest

The sales in this segment have fallen over the past few years as demand for telecom batteries
(which account for a majority of the sales) has slowed down due to muted telecom capex. To
counter this, Time has shifted focus to other products viz. uninterrupted power supply (UPS)
batteries, solar batteries and railway batteries. However, sales have not picked up significantly
(sales grew by 3-4% in volume terms in FY13) and EBITDA margin has remained low. The
company has indicated that it is in discussions with a few interested buyers and may sell this
business if it gets desirable valuations. Since this is not Times core business (plastic
processing) and has been dragging the overall returns of the company, we believe that it
would be beneficial for the company to exit from this business.
Auto components (8% of revenues) slowing CV growth to impact sales

Under this segment, Time manufactures fuel tanks, de-aeration tanks and anti-spray rain flaps
(under the brand name Clearpass) mainly for commercial vehicles. In FY13, sales from this
segment grew by 33% led by 30% growth in the domestic market and 39% growth in the
overseas markets. In the domestic market, the company executed new orders from Tata
Motors while in the international market, the company saw good demand for the anti-spray
rain flaps. However, considering the slowdown in demand for commercial vehicles globally, we
do not expect rapid growth in this segment over the next two years.
HDPE pipes and pre-fabricated structures (8% of revenues) dependent

on government spending
For both HDPE pipes and prefabricated shelters, Time is dependent mainly on government
Time has received an order
orders. In FY13, HDPE pipes revenues grew by 34% y-o-y. Also, the company secured an
worth 1.2 bn from the
order worth 1.2 bn from the Madhya Pradesh government for supply of 2,000 prefabricated
Madhya Pradesh government
shelters executable over FY13-15. We expect the HDPE pipes business to grow at 10-12%
for prefabricated shelters
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.
Composite cylinders Indian market showing signs of opening

up but potential uncertain, Bahrain facility still not approved
Time currently has an installed capacity of 7,00,000 composite cylinders 3,00,000 in India
and 4,00,000 in Bahrain (the Czech Republic facility was moved to Bahrain in FY13). The
Indian facility has received regulatory approval while the Bahrain plant, which is expected to
mainly cater to the Middle East market, is yet to get approvals from various government
authorities.
India plant approved by PESO; focus on private gas distributors initially

As per the regulations in India, both the manufacturer and end-user of composite cylinders
require approval from Petroleum and Explosive Safety Organisation (PESO) for use of this
11
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,
Time has an LOI from
BPCL and HPCL, getting the orders from these companies typically takes time. Hence, Time
Reliance Gas for purchase of
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.
No major capex planned over FY13-15 but return ratios to

remain suppressed due to lower profitability
Time incurred a capex of 8.6 bn over FY10-13 mainly to set up overseas facilities, set up
composite cylinder facilities in India and Bahrain, and expand domestic capacity. The
international capacities are currently running at low utilisation levels due to which the
companys return ratios have declined RoE has declined from 17.1% in FY10 to 12.3% in
FY13 and RoCE has declined from 17.5% in FY10 to 13.8% in FY13. The companys return
ratios have also been impacted by low profitability of the battery business.
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.
Figure 3: Capex expected to reduce
Figure 4: Returns to remain low due to dip in profitability
( 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.
and result in losses on unhedged forex exposure

Time imports 60-70% of its raw material requirements through buyers credit. The company
follows a policy of leaving US$10 mn of its buyers credit exposure unhedged to benefit from
favourable currency movement. However, in the current environment, we believe that this
policy would result in a forex loss and is a key risk for the company. It also has long-term
borrowings of US$ 35 mn in foreign currency as on March 31, 2013 collectively between India
and overseas locations. As per the management, its overseas earnings are sufficient to meet
payment schedules at overseas locations and borrowing in India is fully hedged; hence, it
does not run the risk of incurring losses due to forex fluctuations.
Inability to ramp up utilisation rate of new international

capacities
Times overseas capacities are currently operating at a blended utilisation rate of 52%
(including established and new geographies); 30% of the companys fixed assets are at
Times overseas capacities
overseas locations. We expect utilisation rates of international capacities to pick up led by
are operating at a blended
improvement in global demand and the companys marketing efforts in these geographies.
utilisation rate of 52%
However, delayed recovery in global economies is likely to impact the offtake from Times
facilities and, hence, its future business prospects.
13
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
Figure 6: Industrial packaging to remain the revenue driver
FY08
Figure 5: Revenues to grow at a two-year CAGR of 18%
50%
40%
30%
20%
10%
0%
0%
Revenue
Revenue growth (y-o-y) (RHS)
Industrial Packaging
Life Style Products
Auto Components
Health Care Products
Infrastructure Products
New products
Operating margin to decline

Times EBITDA margin is expected to decline to 14.2% in FY14 from 16.4% in FY13 as the
company is unlikely to pass on the increase in raw material prices to its domestic customers.
We expect 30 bps y-o-y improvement in EBITDA margin in FY15.
EBITDA margin of the

international business is
Figure 7: EBITDA margin to decline by ~200 bps over FY13-15
lower than that of the
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
Adjusted PAT to grow at 8% CAGR over FY13-15, return ratios

to remain supressed
We expect adjusted PAT to decline by 12% y-o-y in FY14 to 909 mn mainly due to the
PAT expected to decline by
decline in EBITDA margin. Also, depreciation is expected to increase by 26% y-o-y due to full
12% y-o-y in FY14
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.
Figure 8: PAT margin to decline
Figure 9: RoE and RoCE to remain low
( 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
Adjusted PAT margin (RHS)
17.5%
FY10
FY11
FY12
RoE
FY13
FY14E
FY15E
RoCE
No stress on the balance sheet

Times has maintained debt:equity of <1x and an interest coverage of over 3x over the past
three years. Time has no significant capex lined up for FY13-15; additional funds will be
required mostly as working capital. We expect Time to meet most of its funding requirement
through internal accruals and do not expect considerable increase in debt levels. We expect
the debt:equity to remain below 1x and interest coverage of more than 3x over FY14-15.
15
Figure 10: Leverage to remain low

(x)
(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
Interest coverage (RHS)
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.
Led by experienced promoters; professional second line

Times management is led by its promoters, who are first generation entrepreneurs and have
wide experience in the polymer processing industry. The company is headed by Mr Anil Jain,
Times promoters have vast

experience in the polymer
processing industry
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.
Proven capabilities in domestic industrial packaging market

Times management has proven its capabilities in the domestic industrial packaging market as
reflected in the 70-75% share. Further, it has been able to add and retain marquee clients in
the domestic market due to its consistent quality and timely services.
Renewed focus on packaging business, its core competency

Time, which started as an industrial packaging player, now has a diversified product portfolio.
However, it has not been able to attain scale in the other business segments infrastructure,
lifestyle, auto components and healthcare and material handling. As the diversification
strategy has not worked in its favour, the management has renewed its focus on the industrial
packaging business, which is its core competency, and has expanded this business
internationally.
Low overseas investment ensured stress-free balance sheet

The company has restricted its investment to US$5-6 mn at each of its overseas locations to
initially test the market and would invest more only if the market potential is proven; it has
taken land and building on lease in most of the new geographies that it has entered. Hence,
the companys balance sheet is not under stress although the company has entered 10 new
geographies.
Management bandwidth may be a challenge

As Time operates in multiple business segments and has entered the international market, we
believe that the top management may find the bandwidth stretched, which in turn could affect
smooth running of operations; this is a key monitorable.
17
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.
Board confirms to statutory requirements; experienced

independent directors
Times board consists of nine members of whom four are independent directors, which meets
the requirement under Clause 49 of SEBIs listing guidelines. Chairman of the board, Mr K. N.
Venkatasubramanian, is a non-executive and independent member. He is the ex-chairman of
Indian Oil and the chairman of a number of oil companies such as IPCL and Gulf Oil. The
independent directors are highly experienced and are from diverse industry backgrounds.
Transparent management, good disclosure levels

Based on our interaction with the management over the past two years, we believe that the
management is transparent and forthcoming with information. Also, the companys quality of
disclosure can be considered good judged by the level of information and details furnished in
the annual report, websites and other publicly available domains. The company is conducting
quarterly earnings calls since Q2FY13 to share information with the minority shareholders.
Board processes in place

The company has all the necessary committees audit, remuneration and investor grievance
- in place to support corporate governance practices. The audit committee is chaired by an
independent director, Mr M K Wadhwa, chartered accountant. The board meetings are
conducted professionally with the detailed agenda reaching the board of directors on time.
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
Fair value is revised to 47 from
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.
Key DCF assumptions

We have forecast free cash flows from FY14 to FY22. The following are our assumptions:
We have assumed cost of equity of 17.4%
We have assumed a terminal growth rate of 3% beyond the explicit forecast period
WACC computation
FY14-22
Terminal value
17.4%
17.4%
Cost of debt (post tax)
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
Terminal growth rate

1.0%
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
Terminal year EBITDA margin

12.0%
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
One-year forward P/E band
One-year forward EV/EBITDA band
()
( 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
Source: NSE, CRISIL Research
P/E premium / discount to Nifty
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
Fair value movement since initiation

()
('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
Total Traded Quantity (RHS)
Source: NSE, BSE, CRISIL Research
CRISIL Fair Value
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
1yr Fwd PE (x)
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
Balmer Lawrie & Co. Ltd
8,929
5.9
NA
NA
1.1
NA
NA
2.6
NA
NA
20.5
NA
NA
Sintex Industries Ltd
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
Supreme Industries Ltd
Source: CRISIL Research, Industry sources
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.
CRISIL IER reports released on Time Technoplast Ltd

Valuation
CMP
Date
Nature of report
Fundamental
grade
Fair value
grade
(on the date of report)
04-Jan-11
Initiating coverage
4/5
71
4/5
58
18-Feb-11
Q3FY11 result update
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
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
Plastic product division of Solutia Europe
160.65
100%
Dec-10
Yung Hsin Taiwan
225.00
90%
Milestones
1992
Production facility commenced at Daman, launched internationally acclaimed XL-ring drums
1993
Collaboration with Mauser, Germany
1998
Lifestyle products launched - entrance matting (DuroTurf & Meadowz) based on special product technology
2000
Consumer packaging - commenced manufacturing of PET sheet and conical pails
2004
Joint venture with Mauser; commenced production of IBC
2005
Development and launch of anti-spray rain flaps
2006
Launch of DuroSoft matting

Started overseas operations, Sharjah, UAE
Acquired TPL Plastech Ltd (Tainwala poly containers)
2007
Public issue in June 2007 of 10 each at a premium of 315 per share

Entered the battery business - acquired NED Energy, Hyderabad
Acquired Pack Delta, Thailand under JV with Mauser
2008
22
Commenced production of automotive components in Poland

Expanded battery capacity - acquired Gulf Powerbeat, WLL, Bahrain
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
Acquired plastics products division of Solutia, Europe

Acquired solar batteries manufacturer Powerbuild, Bengaluru
Acquired Yung Hsin, Taiwan
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
Set up greenfield packaging projects in Malaysia and Vietnam
2013
Received PESO approval for composite cylinder facility in Daman, Gujarat
23
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
EBITDA margin to fall by 200 bps over FY13-15

( mn)
( 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%
Revenue growth (y-o-y) (RHS)
EBITDA
EBITDA margin (RHS)
PAT to grow at a two-year CAGR of 8%
Return ratios to remain suppressed
( 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
Share price movement
Shareholding pattern over the quarters

100%
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%
Adjusted PAT margin (RHS)
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
25
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CRISIL IERIndependentEquityResearch

Time Technoplast Ltd

Enhancing investment decisions

Explanation of CRISIL Fundamental and Valuation (CFV) matrix

Strong upside (>25% from CMP)

Upside (10-25% from CMP)

Align (+-10% from CMP)

Downside (negative 10-25% from CMP)

Strong downside (<-25% from CMP)

About CRISIL Limited

About CRISIL Research

Time Technoplast Ltd

4/5 (Superior fundamentals)

September 17, 2013

5/5 (CMP has strong upside)

Containers and packaging

Overseas packaging: Growth in Asia aided by strategic vendor status

Domestic packaging: Market leader but margin under pressure

KEY STOCK STATISTICS

PERFORMANCE VIS--VIS MARKET

NM: Not meaningful; CMP: Current market price

Source: Company, CRISIL Research estimates

Client servicing desk

For detailed initiating coverage report please visit: www.ier.co.in

Table 1: Time Business environment

service offering drums,

HDPE pipes used for

Turfs and matting used Anti-spray rain flaps Composite

water treatment and

in households, dustbins made of polymers, material

and moulded furniture

containers, and intermediate

de- products such as crates,

Telecom, UPS and

aeration tanks and pallets, bins, etc. and

healthcare products such

Domestic (74%): Pan Domestic

(26%): International (34%):

and Poland and Romania

polymer drums is low - UAE,

spray rain flaps in

one in India and one

Indonesia, Egypt, Bahrain

in Bahrain. The India

South Korea, Malaysia and

cater to the domestic

Time Technoplast Ltd

market share in have a significant market which

large This industry is highly tanks for commercial

packaging number of organised and fragmented with many vehicles.

UAE, unorganised players

Taiwan and Thailand. It is a

makes One of the few players

industry share in this segment. polymer de-aeration with this technology

works Material handling: Time

other Industrial battery: Time Europe: Times brand manufacturers.

very unorganised players

competition from Chinese

flaps, Time has a

3% (mainly due to decline

Low revenues from this

industrial batteries due to

~18% (the company has

segment but expected to