ICICI Direct: Lockdown Led Slowdown Impacts Time Technoplast’s Q1 Performance 

ICICI Direct Report

We believe Time Technoplast Ltd.’s Q1 FY21 performance was in line with management commentary provided in Q4 FY20 wherein the company mentioned a challenging demand scenario in H1 FY21E owing to lockdown.

The management expects a faster demand recovery in coming quarters post ease in lockdown restrictions.

The Company’s Q1 FY20 volume, fell approximately 43%, 45% respectively.

While domestic business (approximately 70% of topline) was hit by regional lockdowns, overseas businesses (approximately 30% of topline) were less impacted in Q1 FY21.

The Company reported approximately 51%, approximately 25% YoY fall in volume of domestic, overseas business, respectively.

However, gross margin in Q1 FY21 was up 54 basis points YoY (167 basis points QoQ) led by better mix and benign raw material prices.

The company’s contribution from added product category increased to 21.3% in Q1 FY21 (versus approximately 19% in FY20, 18.6% in FY19).

However, lower operating leverage dragged overall Ebitda margin down 320 basis points YoY (approximately153 basis points QoQ) at 11.4%.

Finally, the company reported a net loss of approximately Rs 12 crore after providing Rs 25 crore, approximately Rs 37.5 crore for interest, depreciation charges, respectively.

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