Why Time Technoplast Share Price is Rising

Share price of Time Technoplast recently touched its record high, surpassing the previous feat achieved in January 2018.

Once stocks move upwards and breakout from their multi year highs, investors expect the momentum to continue and that's precisely what's happening.

Let's find out why this smallcap stock is rising and what lies ahead.

Why Time Techno Share Price is Rising

#1 Hydrogen Cylinder Manufacturing

The primary reason why shares are rallying non-stop is because the company recently received approval from the Petroleum and Explosives Safety Organization (PESO) for the manufacturing of high-pressure Type-IV composite cylinder, prototype, for hydrogen.

Here's what the company said in its exchange filing -

• The authority has advised us to manufacture the first lot of cylinders for their joint testing and inspection. The testing will be completed in around six months.
  
  We are the first company in India to have received this manufacturing approval & this milestone marks a significant step forward in our efforts towards Sustainable Green Energy Solutions.

Mind you... this is big news for the company... possible one that could change the entire growth scenario. Because with this approval, the company is expected to contribute to the advancement of green hydrogen technology in India.

If you would have followed the management commentary, they had mentioned in the concall that initiatives towards green energy products development is ongoing.

We at Equitymaster have time and again mentioned that there will be proxy plays to India's clean energy revolution... even as the smaller companies don't have the capacity to facilitate an entire green hydrogen plant, they could possibly contribute to the ancillary items and become proxy plays.

#2 Multi-Year Breakout

The other reason why Time Technoplast shares have gained such strong traction in the past couple of days is because they surpassed previous record high touched 6 years back.

When a stock surpasses a multi-year breakout, it's often seen as a significant bullish signal by investors and traders.

While I'm no technical expert, this breakout indicates that the stock has overcome a long-standing resistance level.

This movement is often fueled by a combination of factors, including increased visibility, technical analysis, and a possible improvement in the company's fundamentals.

What Next?

Time Technoplast recently posted its Q3 numbers. The company's consolidated net profit jumped 49.6% to Rs 916 million (m) compared to Rs 612.5 m posted in the year ago period.

Revenue came in at Rs 13.2 bn, registering a growth of 17.4% YoY.

For the first nine months of FY24, the company's consolidated net profit has grown 40.3% on the back of a strong order book.

Over the years, the company has developed strong relationships with reputed customers, which has helped in securing repeat orders.

It even reduced the total debt by Rs 650 m in the first nine months. The company is looking to pare down debt even further.

Financial Snapshot

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Net Sales	35,637	35,780	30,049	36,498	42,894
Growth (%)	15%	0%	-16%	21%	18%
Operating Profit	5,267	5,012	3,910	5,088	5,809
OPM (%)	15%	14%	13%	14%	14%
Net Profit	2,027	1,691	1,034	1,880	2,190
Net Margin (%)	6%	5%	3%	5%	5%
ROE (%)	13.3	10.1	5.7	9.7	10.3
ROCE (%)	16.0	13.4	9.0	12.5	13.7
Dividend (Rs)	0.9	1.0	0.7	1.0	1.3
Debt to Equity (x)	0.5	0.5	0.4	0.4	0.4

Data Source: Ace Equity

According to its management, the company's order book position for CNG cascades and PE pipes looks strong and stable demand for core industrial packaging business is expected to improve margins.

The company's board recently approved the disinvestment of 50% business in Middle East on debt & cash free basis for a valuation of around $25 million.

Going forward, Time Technoplast's dominance in the LPG cylinders and IBC business (overseas) is expected to drive growth, despite industry headwinds.

How Time Technoplast Share Price has Performed Recently

In the past five days, Time Technoplast share price has rallied over 25%.

Time Technoplast has a 52-week high of Rs 262 touched today and a 52-week low of Rs 70 touched on 28 March 2023.

In the past one year, Time Technoplast share price has gained 270%!

Here's a table comparing Time Technoplast with its peers -

Comparative Analysis

Company	Time Techno	Astral	Finolex Ind	Jain Irrigation	EPL
ROE (%)	10.3	18.2	5.7	-2.0	12.3
ROCE (%)	13.7	25.2	7.2	3.9	12.8
Latest EPS (Rs)	12.4	21.2	7.7	15.4	8.6
TTM PE (x)	20.1	93.9	31.9	3.2	20.9
TTM Price to book (x)	2.3	17.8	2.7	0.6	2.8
Dividend yield (%)	0.5	0.2	0.6	0.0	2.4
Industry PE	46.5
Industry PB	3.9

Data Source: Ace Equity

About Time Technoplast

Time Technoplast is the largest manufacturer of large size plastic drums with a dominant market share.

It's also the second largest manufacturer of composite cylinders and third largest intermediate bulk container manufacturer.

To know more, check out Time Techno's financial factsheet and its latest quarterly results.

Happy Investing

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...