Backed by the company’s strong growth prospects, improving return ratios, and attractive valuation, domestic brokerage firm Motilal Oswal has initiated coverage on small cap company Time Technoplast (TIME). The brokerage has given a ‘buy’ rating and a target price of Rs 578 to the company, implying a nearly 41% upside potential from the stock’s closing price on Friday.
Following this update, the shares of Time Technoplast zoomed 8.8% to their intraday high of Rs 446.45 on the BSE.
Between FY21 and FY25, TIME delivered a CAGR of 16% in revenue, 19% in EBITDA, and 39% in PAT, while its EBITDA margin improved by 150 basis points to 14.4%. Going forward, the brokerage projects a CAGR of 15% in revenue, 16% in EBITDA, and 23% in PAT over FY25–28E, with EBITDA margin expected to expand further to approximately 15%.
“Our robust outlook is backed by moderate but stable growth in the established products segment (12% revenue CAGR, 13-14% EBITDA margin) and an anticipated strong results in VAP (20% revenue CAGR, 18%+ EBITDA margin),” Motilal Oswal said in its report.
TIME has consistently built capacity ahead of demand
The brokerage firm noted that TIME has consistently built capacity ahead of demand, strengthening its position as a reliable supplier. Between FY19–25, it invested Rs 11.7 billion (Rs 1.7 billion annually) in capacity expansion—35% of its current gross block—funded through internal accruals. Under VAP, it has diversified beyond LPG and CNG cylinders into hydrogen and oxygen cylinders.
Despite an annual capex of Rs 1.7 billion, TIME’s pre-tax RoCE/RoIC is expected to rise from 18.2% in FY25 to 23–26% by FY28, driven by higher operating results, improved efficiency (sales/gross block rising from 1.6x to 2.1x), and a tighter working capital cycle (down by 15 days). The company also aims to generate Rs 4 billion in annual FCF, helping pare debt and shift from net debt of ~Rs 6 billion in FY24 to net cash by FY27.
Time Technoplast is the world’s largest manufacturer of large-size plastic drums
Time Technoplast is the world’s largest manufacturer of large-size plastic drums, with an impressive 50-60% market share in India and a significant share in 10 other countries. It was the first company to launch intermediate bulk containers (IBC) in India and is now the third largest IBC manufacturer worldwide. Additionally, TIME ranks as the second largest global manufacturer of Type-IV composite LPG and CNG cylinders.
The company’s Value-Added Products (VAP) segment is a high-growth (20–30% CAGR) and high-margin (18%+) business, comprising IBCs (13% of revenue), composite cylinders (11%), and MOX films (3%).
In FY25, VAP contributed 27% to total revenue, with a target to increase this to 35% over the next three years, growing at a 20–25% CAGR—well above the 12% CAGR for established products. A higher revenue share from VAP is expected to support margin expansion and boost overall profitability.
