Time Technoplast Ltd Q1 FY26 Earnings Analysis

- Composite products (CNG, LPG, hydrogen) expected to grow at ~30% CAGR over next 3 years. - Overall company growth targeted at ~15% CAGR. - Composite products currently at 27% of revenue; expected to reach ~35% in 2-3 years. - Revenue from composite products estimated to grow from INR 625 crores in FY '25 to ~INR 1,500 crores in 3 years. - Volume growth in FY '25 was 13% YoY, with overseas volume growth at 15%. - Significant expansion underway with INR 125 crores CAPEX for CNG capacity increase and composite product development. - CNG composite cascade capacity to increase by 36,000 cylinders (from existing 30,000). - Hydrogen cylinder commercial launch planned around FY '26-27, targeting future growth. - Overall business revenue expected to surpass INR 2,500 crores from composite products in 5 years.

- Company expects a composite product growth of 30% annually for the next 3 years, outpacing the 15% overall company growth. - Value-added products' share in total sales is targeted to increase from 27% in FY '25 to 35% by FY '27-'28. - EBITDA margin is forecasted to improve from 14.5% in FY '25 to around 15.5% within 3 years due to product mix improvement and higher composite products contribution. - Return on Capital Employed (ROCE) targeted to reach 20% by FY '26, up from 18.1% in FY '25. - Profit after tax grew 25% year-on-year in FY '25; management aims to maintain or improve this growth with operational efficiency. - Operating cash flow and CAPEX management will keep the company debt-free by FY '27. - Expansion in CNG, LPG, hydrogen composite products and new product launches expected to drive higher earnings going forward.

- FY '25 CAPEX was INR 195 crores, including INR 81 crores for maintenance, automation, and reengineering, and INR 115 crores toward value-added products like IBC and composite products. - Ongoing brownfield expansion covering new products like CNG, LPG, composite cylinders, including hydrogen cylinders with commercial production expected by Q3. - Planned annual CAPEX up to INR 200 crores for at least the next 3 years to support 15% overall growth and 30% growth in composite products. - Expansion underway at a new facility near Vapi (possession expected by July), focused on composite, CNG, hydrogen, and oxygen cylinders. - Investment of around INR 30 crores planned for a new steel drum plant in the Middle East to serve existing regional customers. - Capital investment in automation and consolidation continues incrementally. - Potential future capital raise via QIP of INR 1,000 crores approved but on hold until larger expansion or acquisition opportunities arise. - Battery product development investments ongoing (~90% complete), new battery launches expected within the current financial year. - Expansion includes hydrogen cylinders for drone applications, with commercialization early next year.

- No immediate equity fundraising is planned despite having board and shareholder approval for a QIP of INR 1,000 crores, valid till November 2025. The company is waiting for a bigger expansion or acquisition before raising equity. - Management prefers prudent decision-making given current market conditions and relative cost of funds; they avoid raising equity until necessary. - Regarding debt, the company targets to become debt-free in 2 years, including the completion of ongoing CAPEX. Debt reduction efforts are ongoing, and the company can raise debt in the next 20 days if needed. - CAPEX guidance remains at up to INR 200 crores annually, aligned with growth targets. - Overall, the company aims to be net cash flow positive while continuing growth, with no immediate plans for fresh capital raising either via debt or equity at present.

- The company has a robust order book of approximately INR 185 crores for composite products, including Type 4 composite cylinders. (Page 3) - Industrial Packaging division has an order book around INR 445 crores for the current calendar year, covering both domestic and international markets. (Page 3) - The expected additional LPG composite cylinder order (10 kg size) is currently delayed at higher levels due to management and approval changes. (Page 16) - Discussions and approvals are ongoing for the introduction of 14.2 kg composite LPG cylinders, which are expected to significantly outstrip current volumes. (Page 16) - The order from Indian Oil Corporation (IOC) expected in Q4 got delayed due to personnel changes and is anticipated post-settlement of new management. (Page 12)