Multibagger Alert: Time Technoplast Surges 1,100% in 4 Years – Is It Still a Buy?

Time Technoplast, a top manufacturer of polymer products, has shown incredible growth in recent years, delivering huge returns to its investors. The stock has risen from ₹36.70 four years ago to ₹438 as of the last close, a gain of 1,100%.

From its all-time low of ₹22 in April 2020, the stock has surged nearly 2,000%. On October 16, it reached a new high of ₹462 per share. Despite this big rally, analysts believe the stock still has room to grow.

Rajesh Bhosale, an equity analyst at Angel One, mentioned that the stock is in a strong upward trend. He advised buying on dips, noting that ₹440, which was earlier a resistance level, will now act as support, while ₹500 could be a new resistance level.

Systematix Institutional Equities, another brokerage, is optimistic about the company’s future. They see potential in the company’s composite products, such as LPG and CNG cascade cylinders, and its solid industrial packaging business, which includes products like drums and jerry cans.

Systematix believes Time Technoplast’s financial improvements will help it become debt-free within 2-3 years. They have set a target price of ₹615 for the stock, which suggests a 40% increase from the previous closing price.

Time Technoplast is a leader in industrial packaging and composite products in India, and it is one of the top three players globally. It is also the largest producer of large plastic drums worldwide, with a 50-60% market share in India and significant shares in 10 other countries.

The company’s focus on value-added products (VAP) is expected to drive growth, with a projected 20% revenue increase in this segment. EBITDA margins are expected to stay above 18%, and the company aims for higher returns on capital employed (RoCE), reaching 23% by FY27.

Even with annual capital expenditures (capex) of ₹1.5-1.7 billion, the company is expected to generate more than ₹4 billion in free cash flow each year for the next three years. This cash will likely be used to reduce debt and achieve a net cash position by FY27.

Additionally, Time Technoplast plans to sell ₹2.5-3 billion in non-core assets by FY25-FY26, which will help fund capital expenditures and reward shareholders. However, the company faces risks, especially if there are delays in orders for its composite LPG cylinders and CNG cascades.

In conclusion, analysts remain bullish on Time Technoplast, seeing further growth potential and strong financial prospects ahead.