(CMP: Rs. 39; MCap: Rs. 885 crore)
Time Technoplast reported a weak set of performance during Q4FY20 wherein revenue and profitability were impacted by lockdown and change in product mix.
Q4FY20 Earnings Summary
- Despite being a strong quarter, Time Techno reported ~15% decline in revenue to Rs. 916 crore (lower than our estimate of Rs. 1131 crore) mainly due to lockdown in the month of March'20. On a segment front, revenue from polymer products (plastic drums, PE pipes etc.) declined by ~15% YoY to Rs. 665 crore, while composite products category (includes intermediate bulk container (IBC), composite cylinders etc) revenues declined by ~17% YoY to Rs. 251 crore respectively
- On the margin front, despite benign raw material prices, the gross margin of the company remained flat on a YoY basis (down by 100 bps QoQ) mainly due to change in product mix. Further, higher employee cost and other expenses owing to lower operating leverage dragged EBITDA margin down by 280 bps YoY at 12.9% (Vs I-direct estimate of 14.4%)
- Finally, PAT came in at ~Rs. 38 crore (down by ~48% YoY) much lower than our estimate (-13% YoY to ~Rs. 64 crore) mainly due to lower sales and decline in operating margins
On the balance sheet front, sharp rise in the working capital requirements and lower profitability have put dent on return ratios of the company (RoE/RoCE has plunged to 9%/13% in FY20 from 12%/15% in FY19). We believe, challenging demand conditions of industrial products coupled with higher fixed costs likely to keep profitability of the company under the check in FY21E. We will come out with detailed report post conference call.
Shares of TIME TECHNOPLAST LTD. was last trading in BSE at Rs.37.7 as compared to the previous close of Rs. 37.5. The total number of shares traded during the day was 26090 in over 366 trades.
The stock hit an intraday high of Rs. 38.5 and intraday low of 36.95. The net turnover during the day was Rs. 980881.