A leader in industrial packaging in India and the third largest globally

TIME categorizes its business into two verticals: 1) Polymer Products (64% of the revenue mix) and 2) Composite Products (36% of the revenue mix). However, from a product segment perspective, it categorizes its business into: a) Established Products (73% of the revenue mix) and b) Value-added Products (VAP; 27% of the revenue mix).

Strong and established business model

TIME largely follows a B2B business model (~95% of total revenue). It works with a diversified base of over 900 institutional customers, mainly from the chemicals, FMCG, and pharmaceuticals industries globally. The company has established strong and long-standing relationships with many of these clients. It maintains low customer concentration, with no single client contributing more than 5% to its total revenue. It also benefits from a diversified and strong sourcing/supplier base, procuring most of its raw materials locally through multiple suppliers located near its manufacturing plants. Additionally, TIME effectively manages price volatility through its robust pass-through mechanism. Industrial packaging is a working capital-intensive business, typically operating at a gross margin of ~25%, which restricts manufacturers’ return profiles. Additionally, there is a substantial global reconditioning market where these products are cleaned and reused 3-4 times before ultimately being recycled.

All customer list

Year wise company progress

TIME technoplast is the world's largest manufacturer of largesize 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.  We are optimistic about its value-added composite products (LPG and CNG cascade cylinders), stable and long-standing industrial packaging (drums, jerry cans, IBC etc.) business, and focus on improving financials to turn net debt-free over the next 1-2 years.  After clocking a CAGR of 16%/19%/39% in revenue/EBITDA/PAT over FY21-25, we estimate a CAGR of 15%/16%/23% over FY25-28E, led by strong performance in its value-added product (VAP) segment (20% revenue CAGR, 18%+ EBITDA margin) and strong cash flow generation. Asset monetization, business restructuring, and cost reduction measures will improve operational efficiency and strengthen the balance sheet.  Despite annual capex of ~INR1.7b, we estimate pre-tax RoCE/RoIC to expand from ~18% each in FY25 (FY24: 16-17%) to ~23%/26% in FY28 on healthy operating performance, improved plant efficiency and tightening of net working capital cycle (by 10-15 days). An estimated annual FCF of INR4b+ will be used to pare debt and achieve net cash status in FY27E (vs. net debt of INR5.9b/4.7b in FY24/FY25). We estimate healthy OCF/EBITDA (~60%+) and FCF/PAT (80%+) over the next three years.

Long-standing relationships with marquee customers for global supply TIME’s long-term relationships with several global Fortune 500 companies have enabled it to capture a significant share of their business worldwide. For instance, TIME has maintained a 16-year relationship with Dow Chemicals, catering to 70% of its packaging product requirements across seven countries, including India, Thailand, Taiwan, Vietnam, Bahrain, KSA, and UAE. TIME has a diversified end-user base (no single customer accounts for 5% of total revenue), with significant revenue coming from specialty chemicals and non-cyclical sectors (FMCG, F&B, and paints). These factors enable TIME to steadily grow its volume in the 8-12% range in its Established Products segment (75% revenue mix), while maintaining an EBITDA margin of 12-14%, even amid a volatile environment.

High focus on value-added composite products having strong growth potential and margins
 VAP is a high-growth (20-30% CAGR), high margin (18%+) business for TIME.  The company's VAP basket mainly consists of IBC (~13% of total revenue), composite cylinders (LPG domestic, CNG cascades; ~11% of total revenue), and MOX films (cross-laminated film; ~3% of total revenue).  TIME was the first company to launch IBC in India and is the 3rd largest IBC manufacturer worldwide.  It is also the first company to have launched Type-IV composite cylinders for LPG and CNG in India and is the 2nd largest composite cylinder manufacturer globally.  Management believes the composite cylinder business holds significant potential with wide-ranging applications across various industries. To tap into this opportunity, the company is constantly evaluating new products with strong revenue-generating potential.  In FY25, the VAP segment contributed 27% to total revenue, which the company aims to increase to 35% over the next three years (at 20-25% CAGR), likely outpacing the growth in the established products segment (~12% CAGR).  The rising revenue mix of VAP would augur well for TIME's overall margins.

Asset monetization, business restructuring and cost reduction measures to improve operational efficiency and strengthen balance sheet  TIME is in the process of monetizing a few non-core and non-performing assets in India, restructuring its business and reducing costs.  With a greater focus on high margin VAPs, the company has identified assets to monetize worth INR1.25b, of which assets worth INR740m were already monetized in the last two years and the balance would be done in FY26.  It also plans to divest its stake in NED Energy, a subsidiary company, in the future once it achieves a decent scale.  As part of business restructuring, TIME aims to consolidate operationally inefficient small manufacturing units into nearby large units to enhance their efficiency levels.  On cost reduction, it plans to install solar panels at manufacturing plants in many states to reduce its power and fuel costs by over INR250m annually.  Being a large user of polymer as its raw material, TIME is also exploring options to set up polymer recycling plants in all regions, starting from the west, at INR1.2b capex for efficient RM sourcing.  These initiatives will help TIME improve its operational efficiency and drive superior RoCE and cash flows.

Financial performance

EBITDA Margin

Revenue

Valuation and view

Robust outlook; initiate with BUY  Over FY21-25, TIME recorded a CAGR of 16%/19%/39% in revenue/EBITDA PAT, with EBITDA margin of 14.4% (up 150bp during the period). We now estimate a CAGR of 15%/16%/23% over FY25-28E with EBITDA margin expanding to ~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).  Considering its strong growth prospects, improving return ratios and attractive valuation (~16x FY27E P/E), we initiate coverage on TIME with a BUY rating and a TP of INR578 (41% upside), based on 22x FY27E P/E (close to sector average).

Key risks & concerns

 Sourcing of raw materials is an important part of TIME’s business, as they constitute over 70% of the company’s revenue. Polyethylene (PE) granules, produced from oil and natural gas, are an essential raw material across all its business divisions. The company imports most of these granules from neighboring countries, with the rest from local manufacturers. Its procurement is mostly through open market purchases or both short- and long-term supply contracts. As the global market for recycled plastics evolves, TIME expects the demand for virgin polyethylene to increase. Countries such as China, India, Vietnam, Indonesia, the US, and those in Europe are significantly investing in recycling, which is expected to sustain overall demand in the long term.  TIME has developed many products that are first in the country and face regulatory risks. These products include composite LPG and CNG cylinders, having been exposed to government regulation. While a part of the investments is upfront, revenue is earned only gradually, once the markets for these products evolve. Thus, failure in the pickup of these products could hamper the company’s financials.  TIME is exposed to polymer price fluctuations, which are deterministic on the supply and demand situations in Indian and international markets. Polymers are crude derivatives that mostly trail crude prices. Volatility in crude prices could have a bearing on the company’s financials.  TIME’s business is exposed to foreign exchange fluctuations, as 34% of its revenue (~INR19b) came from overseas markets in FY25. Apart from currency fluctuations, import/export regulations, customs procedures, and changes in government policies and regulations are other factors that could impact the company’s business performance. However, TIME has mitigated some of these risks by setting up manufacturing plants in 11 countries (including India) to serve the local demand in those countries.

Time Technoplast Ltd 120-162
Expected level 200
Support 100

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Westlife Foodworld Limited Company Details Report

Westlife Foodworld Limited (earlier known as Westlife Development Limited) is one of the fastest growing companies in the Quick Service Restaurant (QSR) sector in India. The company’s primary business is to establish and operate McDonald’s restaurants across West and South India, through its wholly owned subsidiary Hardcastle Restaurants Pvt. Ltd. (HRPL). They are market leaders in West India and moving towards a leadership position in South India. Westlife now have a total of 408 restaurants, including 383 McCafes, 86 Drive Thrus and 323 EOTF (Experience Of The Future) restaurants across 66 cities. Over the years, McDonald’s extended its service from Dine-in to Drive-thru, On-the-Go and McDelivery (online ordering through the app and website), widening its omni-channel convenience and accessibility. The company intends to establish market leadership through network expansion in tier-1 and tier-2 cities with a focus on South India, increasing the drive-thru portfolio and continuing modernization of stores. Westlife pays a royalty to McDonald’s Corp. The royalty rate for FY24 was 4.9% of revenue. In FY25 and FY26 royalty will be at 5% of revenue with rate increase from FY27 onwards. They believe that the increase will be progressive in nature over the years from FY27 onwards.

McDonald’s addresses breakfast, lunch, dinner, coffee, snacking and dessert needs. They also launched McCafe, McBreakfast, McDelivery and a dessert kiosk to enhance their relevance within and beyond meal timings. McCafé is McDonald’s in-house coffee chain offering over 45 hot and cold beverages. Besides serving delectable hand-crafted coffee made from 100% Arabica beans, it also offers a range of non-aerated, dairy and fruit-based beverages. McCafé now enjoys a loyal base of customers who walk into McDonald’s for its coffee and desserts, hence giving customers one more reason to visit their restaurants. McDonald’s launched the McDelivery Services App to provide consumers the option to order their favorite burgers and fries at their fingertips. Over the years McDelivery has grown to become one of the key growth drivers for the brand. It is currently available across various platforms enabling delivery across 5,500+ pincodes across West and South India. With McBreakfast, McDonald’s introduced the first ever branded breakfast category in India. McBreakfast offers customers a range of convenient breakfast options. The McDonald’s breakfast menu is an amalgamation of the classic Continental and Indian offerings. Dessert Kiosks are McDonald’s booths that operate outside the restaurants and offer customers an array of delicious desserts. They are located strategically to maximize visibility, thereby creating another occasion for people to consume their food. Even though McDonalds is an American brand, it has adapted its menu in India around Indian palates (fusion, international, vegetarian and non-vegetarian). McVeggie & McAloo Tikki is a great example of innovative dishes that McDonalds brought which won over the Indian consumers.

Revenue mix

Number of store year wise

#SALES #GROWTH 5 Year CAGR 10.3%

In FY25, the company recorded sales of ₹2,491 cr, increasing by 4% YoY, majorly led by volume as the average check remained stable during the period. SSSG was negative 2.9% on a base of negative 1.5% in FY24. On-premise business contributed 58% to the total sales. Digital sales (including application and self ordering kiosks) contributed ~72%. Average sales per store (on a TTM basis) was ₹5.9 cr. It added 41 net new stores, during the period. However, these new additions impacted the average unit volume. Revenue in Q1 FY26 was ₹658 cr, a growth of 7% YoY. SSSG was 0.5% YoY for the period, driven by stable volume growth and average bill growth. The onpremise business grew by 8% YoY and contributed 59% to revenue. Average sales per store on a TTM basis, remained stable at ₹6.2 cr. Overall, the consumption trends remained stable.

#EBITDA #GROWTH 5 Year CAGR 9.3%

In FY25, the EBITDA stood at ₹320 cr witnessing a degrowth of 13% YoY. Gross profit improved by 4% to ₹1,746 cr. Employee benefit expense saw an increase of 10% and royalty expense increased by 9% YoY. In Q1 FY26, the EBITDA stood at ₹85 cr, up by 8.5% YoY. Gross profit stood at ₹471 cr, up by ~8% YoY. Employee benefit expense grew by 9% YoY, cost of goods sold increased by 3% YoY and royalty costs witnessed a growth of 5% YoY.