Kotak Securities has given a buy rating on Time Technoplast with a target price of Rs 214.
This is how the brokerage looks at the stock:
Time Technoplast reported healthy operating level performance for Q2FY18. Profits exceeded our estimates. We continue to maintain our positive stance on the company in view of healthy earnings growth coupled with improving return ratios. We value the stock at 18x FY19 earnings (18x FY19 earnings earlier) and arrive at a price target of Rs 214 (Rs.210 earlier). Our target multiple is based on 1) improving trajectory in ROCE 2) Improvement in share of “value added products” 3) huge potential for composite cylinders.
The stock has been a stellar performer in the past twelve months and has given significant returns. In view of the robust earnings growth, we now move rating to “BUY” from “Accumulate” earlier.
Key Risks: Delay in capacity expansion & commercialization of new products. Currency fluctuation & pricing of key raw material i.e. HDPE.
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