The quarter showcased improving operational efficiency with margins expanding across the board, yet investors remain cautious as the stock languishes in mildly bearish technical territory. With a proprietary Mojo Score of 61 out of 100, the company sits firmly in "HOLD" territory, reflecting a complex investment narrative where strong fundamentals collide with valuation concerns and technical weakness.
The December 2025 quarter marked a continuation of Time Technoplast's steady growth trajectory, with net sales reaching an all-time quarterly high of ₹1,564.77 crores, up 3.55% sequentially from ₹1,511.11 crores in Q2 FY26. On a year-on-year basis, revenue growth accelerated to 12.76%, demonstrating resilient demand across the company's diversified product portfolio spanning industrial packaging, automotive components, and infrastructure solutions.
What particularly impressed was the margin expansion story. Operating profit before depreciation, interest, and tax (excluding other income) climbed to ₹233.51 crores, translating to a margin of 14.92%—the highest quarterly margin recorded in recent periods. This 18-basis-point sequential improvement and 46-basis-point year-on-year expansion reflects effective cost management and favourable product mix dynamics.
Financial Performance: Profitability Gains Momentum
Time Technoplast's Q3 FY26 results revealed a company firing on multiple cylinders. Net profit after tax stood at ₹128.52 crores, whilst consolidated net profit reached ₹126.34 crores, marking robust growth of 9.44% quarter-on-quarter and 25.39% year-on-year. The PAT margin expanded to 8.21%, up from 7.76% in the previous quarter and 7.38% in the corresponding quarter last year.
| Quarter | Net Sales (₹ Cr) | QoQ Growth | YoY Growth | Operating Margin | PAT Margin | Net Profit (₹ Cr) |
|---|---|---|---|---|---|---|
| Dec'25 | 1,564.77 | +3.55% | +12.76% | 14.92% | 8.21% | 126.34 |
| Sep'25 | 1,511.11 | +11.71% | +10.26% | 14.74% | 7.76% | 115.44 |
| Jun'25 | 1,352.65 | -7.90% | +9.97% | 14.41% | 7.14% | 95.10 |
| Mar'25 | 1,468.74 | +5.84% | — | 14.55% | 7.61% | 109.52 |
| Dec'24 | 1,387.74 | +1.26% | — | 14.46% | 7.38% | 100.76 |
| Sep'24 | 1,370.52 | +11.42% | — | 14.32% | 7.28% | 98.36 |
| Jun'24 | 1,230.05 | — | — | 14.18% | 6.54% | 79.31 |
The revenue growth was broad-based, with the company maintaining its leadership position in the industrial packaging segment whilst expanding its footprint in automotive and infrastructure applications. Employee costs remained well-controlled at ₹77.41 crores, representing 4.95% of sales, indicating operational efficiency despite inflationary pressures.
Interest costs continued their declining trajectory, falling to ₹18.83 crores in Q3 FY26 from ₹21.50 crores in Q2 FY26 and ₹22.47 crores in the year-ago quarter. This 16.18% year-on-year reduction in interest burden reflects the company's improved financial structure and deleveraging efforts. Depreciation stood at ₹45.98 crores, marginally higher than the previous quarter's ₹45.73 crores.
Operational Excellence: Capital Efficiency Reaches New Heights
Time Technoplast's operational metrics paint an encouraging picture of a company optimising its asset base. The return on capital employed (ROCE) for the half-year period stood at an impressive 17.71%—the highest recorded level, demonstrating superior capital efficiency. This represents a significant improvement from the average ROCE of 14.35% over the past five years, signalling that management's capital allocation decisions are bearing fruit.
The company's return on equity (ROE), whilst more modest at 11.21% on average, has shown improvement with the latest reading at 13.83%. Whilst this lags behind some peers in the plastic products sector, it represents steady progress and reflects the company's conservative leverage profile. The balance sheet strength is evident in the debt-to-equity ratio of just 0.23 times as of the half-year period—the lowest in recent memory.
Capital Efficiency Milestone
Time Technoplast achieved its highest-ever half-yearly ROCE of 17.71% in H1 FY26, demonstrating exceptional capital deployment efficiency. The operating profit to interest coverage ratio surged to 12.40 times in Q3 FY26, reflecting robust debt servicing capability and financial flexibility for growth investments.
The company's working capital management deserves particular attention. Cash and cash equivalents reached ₹189.23 crores in the half-year period, the highest level on record, providing substantial liquidity cushion. This strong cash position, combined with declining debt levels, positions Time Technoplast favourably for both organic expansion and potential acquisitions.
Operating profit before interest and tax reached ₹233.51 crores in Q3 FY26, translating to an operating profit to interest coverage ratio of 12.40 times—the highest quarterly reading. This comfortable coverage provides significant financial flexibility and underscores the quality of earnings. The debt-to-EBITDA ratio of 1.10 times remains comfortably low, well below concerning levels and indicating minimal balance sheet stress.
Industry Context: Navigating Polymer Market Dynamics
The industrial plastics sector in India has witnessed mixed fortunes over the past year, with raw material volatility and demand fluctuations creating a challenging operating environment. Time Technoplast's 12.76% year-on-year revenue growth in Q3 FY26 significantly outpaced the broader Plastic Products - Industrial sector, which posted a negative return of -1.28% over the past year.
The company's diversified product portfolio spanning industrial packaging, automotive components, composite cylinders, and infrastructure solutions has provided resilience against sector-specific headwinds. The industrial packaging segment continues to benefit from growth in FMCG, chemicals, and agricultural sectors, whilst the automotive division is capitalising on the shift towards lightweight materials and electric vehicle components.
Competitive Positioning
Time Technoplast maintains its position as one of the leading global manufacturers of polymer products with operations across 10 countries outside India. The company's international presence in Asia, Middle East, and North Africa provides geographic diversification and access to growing markets. With a strong focus on technology-based products and innovation, Time Technoplast has carved out a differentiated position in the commoditised plastics industry.
The company's five-year sales growth of 13.34% and even more impressive EBIT growth of 21.67% demonstrate its ability to gain market share and improve profitability simultaneously. This operating leverage, combined with disciplined capital allocation, has enabled Time Technoplast to deliver value despite sector challenges.
Peer Comparison: Valuation Discount Reflects Mixed Signals
Time Technoplast's valuation multiples present an interesting contrast with its peer group in the industrial plastics sector. Trading at a price-to-earnings ratio of 23.28 times trailing twelve-month earnings, the stock commands a significant discount to the sector average of approximately 53 times, with peers like Astral at 82.98 times and Shaily Engineering at 67.60 times.
| Company | P/E (TTM) | P/BV | ROE (%) | Debt/Equity | Div Yield (%) |
|---|---|---|---|---|---|
| Time Technoplast | 23.28 | 3.22 | 11.21 | 0.16 | 0.58 |
| Supreme Industries | 59.88 | 8.52 | 22.90 | 0.00 | 0.91 |
| Astral | 82.98 | 11.32 | 17.96 | -0.08 | 0.24 |
| Finolex Industries | 23.69 | 2.01 | 12.00 | -0.33 | 1.88 |
| Garware Hi Tech | 31.40 | 3.86 | 10.83 | -0.27 | 0.29 |
| Shaily Engineering | 67.60 | 15.55 | 14.12 | 0.26 | 0.09 |
The valuation discount is partially justified by Time Technoplast's lower return on equity of 11.21% compared to peers like Supreme Industries (22.90%) and Astral (17.96%). However, the company's conservative balance sheet with minimal leverage (debt-to-equity of 0.16) and improving profitability trajectory suggest the discount may be excessive.
Time Technoplast's price-to-book value of 3.22 times also trades at a substantial discount to the peer average of approximately 8.3 times. This could reflect either an attractive entry point or concerns about the sustainability of returns. The company's dividend yield of 0.58%, whilst modest, is supported by a conservative payout ratio of 14.62%, leaving ample room for reinvestment in growth opportunities.
With a market capitalisation of ₹9,825.81 crores, Time Technoplast ranks fourth amongst its peer group, positioning it as a mid-sized player with growth potential. The company's PEG ratio of 3.33, however, suggests the stock may be expensive relative to its growth prospects, a factor weighing on investor sentiment.
Valuation Analysis: Fair but Not Compelling
Time Technoplast's current valuation presents a nuanced picture. At ₹199.05, the stock trades at 23.28 times trailing earnings and 3.22 times book value. The enterprise value-to-EBITDA multiple of 12.37 times and EV-to-capital employed of 2.91 times appear reasonable given the company's improving ROCE of 18.50%.
The Mojo valuation grade of "Fair" (upgraded from "Attractive" on November 3, 2025) reflects this balanced assessment. Whilst the stock isn't expensive on absolute metrics, the PEG ratio of 3.33 indicates limited upside potential at current levels unless growth accelerates materially. The stock's 20.04% decline from its 52-week high of ₹248.95 has brought valuations to more reasonable levels, but concerns about near-term momentum persist.
The stock's distance from its 52-week high provides some comfort for value-oriented investors, whilst the 29.78% premium to the 52-week low of ₹153.38 suggests the market has already priced in some of the positive developments. Fair value estimates suggest limited upside from current levels, making this a "show me" story where further operational improvements are needed to justify higher valuations.
Shareholding Pattern: Promoter Reduction Raises Questions
The shareholding pattern reveals an intriguing dynamic that warrants investor attention. Promoter holding declined to 47.51% in December 2025 from 51.62% in March 2025, with a notable 4.16% reduction occurring between September and November 2025. This 4.11 percentage point decline over three quarters, whilst not alarming, does raise questions about promoter conviction at current valuations.
| Quarter | Promoter | FII | Mutual Funds | Insurance | Other DII | Public |
|---|---|---|---|---|---|---|
| Dec'25 | 47.51% | 11.66% | 13.37% | 0.18% | 3.15% | 24.13% |
| Nov'25 | 47.46% | 11.05% | 13.39% | 0.15% | 3.08% | 24.86% |
| Sep'25 | 51.62% | 8.42% | 12.41% | 0.00% | 0.77% | 26.78% |
| Jun'25 | 51.62% | 8.29% | 12.12% | 0.00% | 0.80% | 27.17% |
| Mar'25 | 51.62% | 8.07% | 11.96% | 0.00% | 1.03% | 27.32% |
Offsetting the promoter reduction, institutional investor interest has surged. Foreign institutional investors increased their stake from 8.07% in March 2025 to 11.66% in December 2025, a substantial 3.59 percentage point increase. Mutual fund holdings also rose from 11.96% to 13.37% over the same period, reflecting growing confidence amongst professional investors in the company's long-term prospects.
The emergence of insurance companies as shareholders (0.18% in December 2025) and the significant jump in other domestic institutional investors from 1.03% to 3.15% suggest broader institutional acceptance. Total institutional holdings now stand at 28.36%, a healthy level that provides stability and liquidity. The absence of promoter pledging is a positive indicator of financial health.
Stock Performance: Technical Weakness Weighs on Sentiment
Time Technoplast's stock performance presents a tale of two timeframes. Over longer periods, the stock has delivered exceptional returns—up 368.63% over three years, 436.16% over four years, and an astounding 793.60% over ten years. These returns have massively outperformed the Sensex, generating alpha of 331.52%, 393.68%, and 533.13% respectively over these periods.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +4.87% | -0.86% | +5.73% |
| 1 Month | +10.55% | -0.92% | +11.47% |
| 3 Months | -0.55% | -1.92% | +1.37% |
| 6 Months | -10.89% | +2.88% | -13.77% |
| YTD | +5.99% | -2.77% | +8.76% |
| 1 Year | +3.89% | +8.82% | -4.93% |
| 2 Years | +99.25% | +15.80% | +83.45% |
| 3 Years | +368.63% | +37.11% | +331.52% |
However, the near-term picture is less encouraging. The stock has underperformed over the past six months, declining 10.89% whilst the Sensex gained 2.88%, resulting in negative alpha of -13.77%. The one-year return of 3.89% also lagged the Sensex's 8.82% gain, marking a period of consolidation after the extraordinary multi-year run.
Technical indicators paint a mixed picture. The stock trades in mildly bearish territory, having changed from bearish to mildly bearish on February 4, 2026 at ₹189. The stock currently sits below all major moving averages—the 5-day (₹197.73), 20-day (₹184.25), 50-day (₹185.15), 100-day (₹199.21), and 200-day (₹207.21) moving averages. This technical setup suggests resistance at higher levels and potential for further consolidation.
The stock's high beta of 1.59 indicates significantly higher volatility than the broader market, with annualised volatility of 41.40% over the past year. This high-risk profile, combined with the current mildly bearish technical trend, creates a challenging entry point for risk-averse investors despite the strong fundamental performance.
Investment Thesis: Quality Fundamentals Meet Technical Headwinds
Time Technoplast's investment case rests on three pillars: improving operational efficiency, strong balance sheet, and diversified revenue streams. The company's Mojo Score of 61 out of 100 places it in the "HOLD" category, reflecting a balanced assessment across four key parameters.
The "Good" quality grade reflects the company's healthy long-term growth profile (13.34% sales CAGR, 21.67% EBIT CAGR over five years), absence of promoter pledging, and strong institutional participation at 28.36%. The positive financial trend is underpinned by record-high quarterly metrics including ROCE, operating profit to interest coverage, and cash balances.
However, the mildly bearish technical trend and fair (not attractive) valuation create a mixed near-term outlook. The company's strengths—high management efficiency with 18.50% ROCE, low debt-to-EBITDA of 1.10 times, and strong growth trajectory—are offset by concerns including the elevated PEG ratio of 3.33 and recent promoter stake reduction.
Key Strengths & Risk Factors
✅ KEY STRENGTHS
- Exceptional Capital Efficiency: ROCE of 18.50% (latest) and 17.71% (H1 FY26) demonstrates superior asset utilisation and improving returns on invested capital.
- Strong Balance Sheet: Debt-to-equity ratio of 0.23 times and debt-to-EBITDA of 1.10 times provide financial flexibility and minimal leverage risk.
- Robust Growth Trajectory: Five-year EBIT CAGR of 21.67% outpacing sales CAGR of 13.34% indicates expanding profitability and operating leverage.
- Margin Expansion: Operating margin reached 14.92% in Q3 FY26, the highest quarterly level, reflecting effective cost management and favourable mix.
- Strong Debt Coverage: Operating profit to interest ratio of 12.40 times provides comfortable cushion for debt servicing and financial flexibility.
- Growing Institutional Confidence: Institutional holdings at 28.36% with FII stake rising from 8.07% to 11.66% in nine months signals professional investor conviction.
- Zero Promoter Pledging: Absence of pledged shares indicates strong promoter financial health and reduces governance concerns.
⚠️ KEY CONCERNS
- Promoter Stake Reduction: Promoter holding declined from 51.62% to 47.51% over three quarters, raising questions about long-term conviction.
- Elevated PEG Ratio: PEG ratio of 3.33 suggests limited upside potential at current valuations relative to growth prospects.
- Technical Weakness: Mildly bearish trend with stock trading below all major moving averages creates near-term headwinds.
- Below-Peer ROE: Return on equity of 11.21% (average) lags peers like Supreme Industries (22.90%) and Astral (17.96%).
- High Volatility: Beta of 1.59 and volatility of 41.40% indicate significant price fluctuations and higher risk profile.
- Modest Dividend Yield: Dividend yield of 0.58% provides limited income support during periods of price weakness.
- Six-Month Underperformance: Stock declined 10.89% over six months whilst Sensex gained 2.88%, indicating loss of momentum.
Outlook: What to Watch
📈 POSITIVE CATALYSTS
- Sustained Margin Expansion: If operating margins hold above 15% for multiple quarters, it would validate the structural improvement story.
- ROCE Sustainability: Maintaining ROCE above 17% would demonstrate that recent efficiency gains are sustainable rather than cyclical.
- Market Share Gains: Continued outperformance versus sector growth rates would indicate competitive advantage strengthening.
- Institutional Accumulation: Further increases in FII and mutual fund holdings would signal growing confidence in the growth story.
- Technical Breakout: A decisive move above ₹207 (200-day MA) could trigger momentum-driven buying and trend reversal.
🚩 RED FLAGS
- Further Promoter Reduction: Additional stake sales by promoters would raise serious concerns about insider confidence and long-term outlook.
- Margin Compression: Any decline in operating margins below 14% would indicate pricing pressure or cost inflation challenges.
- Working Capital Deterioration: Increase in debtor days or inventory levels would signal operational efficiency concerns.
- Debt Increase: Any material uptick in debt levels without corresponding EBITDA growth would pressure the balance sheet.
- Technical Breakdown: A break below ₹180 could trigger stop-losses and accelerate the downward momentum.
The Verdict: Hold for Patience, Wait for Fresh Entry
Score: 61/100
For Fresh Investors: Avoid initiating positions at current levels. Whilst fundamentals are improving, the technical setup is unfavourable and valuation provides limited margin of safety. Wait for either a technical trend reversal above ₹207 or a correction towards ₹170-180 for better risk-reward. The promoter stake reduction warrants monitoring before committing fresh capital.
For Existing Holders: Continue holding with a medium-term perspective. The operational improvements are genuine, balance sheet strength provides downside protection, and institutional accumulation suggests professional investors see value. However, avoid averaging up at current levels. Consider partial profit-booking if the stock rallies towards ₹230-240 without corresponding fundamental improvements.
Fair Value Estimate: ₹210-220 (5-10% upside), contingent on sustaining Q3 FY26 margin levels and ROCE above 17% for the full year. Downside support exists at ₹170-180 levels where valuation becomes more attractive.
Note— ROCE = (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. The stock market involves risk, including the potential loss of principal.
