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Ladies and gentlemen, good day, and welcome to the Time Technoplast Q4 FY '22 Conference Call hosted by PhillipCapital India Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vikram Suryavanshi from PhillipCapital India Private Limited. Thank you. And over to you.
Thank you, Mike. Good afternoon, and very warm welcome to everyone. Thank you for being on the call of Time Technoplast Limited. We are happy to have the management with us here today for question-and-answer session with the investment community. Management is represented by Mr. Sanjaya Kulkarni, Chairman and Independent Director; Mr. Bharat Vageria, Managing Director; Raghupathy Thyagarajan, Full-time Director; Mr. Vishal Jain, Non-Executive Director; Mr. Sandip Modi, Senior Vice President, Accounts and Corporate Planning; and Mr. Hemant Soni, Head Legal. Before we start with the question-and-answer session, we'll have some opening comments from the management. Now I hand over the call to Mr. Sanjaya Kulkarni for opening comment. Over to you, sir.
Thank you very much, Vikram. Good afternoon, and warm welcome to all the participants on this call. As Vikram has already said, I have with me Bharat Vageria, who is now the Managing Director of the company; Raghupathy Thyagarajan, who is a whole-time Director and a promoter of the company; Vishal Jain, who is the Non-Executive Director. He joined the Board recently. He is the son of Mr. Anil Jain. Mr. Sandip Modi, who is the Senior Vice President and Corporate Planning; and Hemant Soni, who is the Head of Legal. Now we have a very difficult call today. While the financials are pretty good, FY this year has been a very unforgettable year for us as we lost our beloved, Mr. Anil Jain, who is a co-founder and the Managing Director of the company, in a freak accident on 6th of February 2022. Mr. Jain played a pioneering role in the growth of the company right from the beginning. He along with his 3 other co-promoters, had started the company and have been spearheading the growth of the company since then. After his demise, the other co-promoters took additional responsibility and have taken the pledge to continue his dream of growing the company. His leadership and vision will continue to remain strong, and his values will continue to motivate and guide us through this path over the next many, many years. Although the year started with a lot of business uncertainties with COVID-19 second wave and later the third wave, things are back to normal. We are pleased to have surpassed our pre-COVID-19 performance of FY '20 and are confident of continuing this growth momentum in the future. I will now ask Bharat Vageria, the Managing Director, to go through all the financials and give his remarks. Thank you. .
Thank you, Chairman, sir. And good afternoon to all of my investor. FY '22 remain very challenging due to global supply chain disrupting, triggering volatility in the raw material prices. Despite this, company has witnessed an overall encouraging performance and closed the year on a strong note to deliver a robust revenue growth of 21% as promised. This growth was largely driven by increasing demand of composite products. During the quarter, that is Q4 FY '22, we received the single largest order of over 0.75 million type-IV LPG composite cylinders from a largest -- from a oil distribution company, Indian Oil Corporation Limited, a first by an Indian public sector OMC. Furthermore, our order book for the supply of cascade with Type-IV CNG composite cylinder has crossed INR 2.5 billion. We remain highly optimistic to continue this growth trajectory given a healthy order book for CNG cascade and encouraging demand outlook from the end user industry in the industrial packaging. We are here essentially to talk about our results for Q4 and full year ended March 31, 2022, and outlook for the next year. The result are already announced, but I will just walk through some of the key financial and operational highlights. On a consolidation basis, in Q4 FY '22, revenue grew by 9% as compared to corresponding quarter last year, that is Q4 FY '21, and 10% as compared to previous quarter, that is Q3 FY '22. During Q4 FY '22 -- corresponding Q4 FY '22 number in the brackets on a consolidated basis, net sales, INR 1,040 crores as against INR 953 crores. EBITDA grew INR 140 crores as against INR 131 crores. Profit after tax, INR 56 crores as against INR 62 crores. Cash profit, 97 as against 90. Key highlights compared to quarter -- compared with the corresponding previous year, net sales increased by 9%; India, 7%; overseas, 15%. Volume increased 7%, India, 3%, overseas, 11%. EBITDA increased 7%. PAT increased by 6%. The bid and paid margins were flat at 13.5% and 5.3% as against 13.8% and 5.5%, respectively. Especially in Q4, we have seen the polymer prices have increased substantially, which, even though we are able to pass on, but with the little time gap. Therefore, this is affecting the margin by around 0.5% to 0.7%. Now if you will see the whole year, the company in FY '22 has surpassed its pre-COVID-19 performance of FY '20. During the year ended 31st March 2022, company has achieved a net sale of INR 3,653 crore, which is high in terms of the revenue, I can say it's the highest in the -- till the period of company existence, as against INR 3,009 crores. EBITDA of INR 509 crores as against INR 391 crores. Profit after tax, INR 188 crores, as against INR 103 crores. CAP profit is INR 350 crores as against INR 257 crores. As we all are aware that FY 2021, there was a national wide lockdown was there for initially 40 to 45 days. Therefore, the difference is very high compared to '21 to '22. Now compared to previous year, net sales increased by 21%, volume increased by 17%, EBITDA increased by 13%. But prior debt increased by 82%. For the full year FY '22, EBITDA margin increased by 90 basis point and stood at 13.9% as against 13% FY '21. Net profit margin also increased by 170 basis points, 5.1% as compared to 3.4%. Now share of the business, the value-added product share has increased and grew by 27% in FY '22 as compared to FY '21. Established product grew by 20%. The share of value-added product is 21% of the total sale in FY '22 as against 20% in FY '21. Now I share with you India and overseas business, which in '21 was 69% and 31%, which is now 68% and 32%, 68% Indian operation, 32% overseas operations. As far as the EBITDA part is concerned, Indian operation, 14%, overseas operation, 13.7%. The total debt as of 31st March [ 2002 ] stood at INR 825 crores, net debt INR 731 crores as against INR 810 crores. Net debt of INR 723 crores. The CapEx incurred during the FY '22, INR 186 crore, which is well within the budgeted target, between INR 175 crores to INR 200 crores. But this includes also towards the INR 79 crore includes towards the capacity expansion, we've been using Automation for the existing established product and 120 -- INR 107 crores towards the value-added products, which includes mainly composite products, IBC and the CNG product, and small expansion in the LPG product. Then I am pleased to inform you that Board of Directors have recommended a dividend of 100%. Previous year, it was 70%. So there is an increase of almost 34 -- 43% increase is there, with INR 1 per share on equity share of INR 1, subject to the approval of the shareholders. Now we have given the notice and informed the exchanges about the consolidation from restructuring of the overseas businesses. Again, in this respect, resolution was placed to the shareholders. And I'm very pleased to tell you, the 3 resolution were put up for the approval of the shareholders. One for approval of this consideration cum restructuring overseas business; #2, appointment of Mr. Bharat Vageria from directors to the Managing Director, confirmation; #3, Vishal Jain, who was appointed as an additional director, with all 3 resolution have been confirmed by shareholders, and the approvals are on place by more than 99% voting in favor of that. Now the consolidation from restructuring as informed and meeting was on [ 9 ] 2022 [indiscernible] for investment and consolidation by view of restructuring to the JV, where the company will disinvest majority of the holding, but minority will continue. And that process is on. That resolution is completely approved by shareholder on May 10. And as you have mentioned, and once again, [indiscernible] the company will be benefit by utilization of the restatement of the overseas businesses with use for the repayment of debt. Capex for the composite cylinders, LPG, CNG in hydrogen, especially I'm telling you hydrogen, and core business in India to meet the whole market demand and benefit to the shareholders. Now as far as this process is concerned, I know there's somebody must be thinking about the time line. But I'm great to tell you, this entire process will be completed prior to end of 30th September 2022. In the next 3 months, this process will be completed. It is on. I now would like to open the floor to answer specific questions in reference to the Q4 results and the annual results.
[Operator Instructions] We have the first question from the line of Harsh Shah from Dimensional Securities.
Regarding to the overseas operation, what is the kind of demand that we are looking in Europe and U.S.? So we have been hearing about the high inflation globally then this. And you've [indiscernible] the stagflation or economy not growing well enough? So what is your [indiscernible] where you're seeing some slowdown, or which...
Sorry, Mr. Harsh Shah. But your voice is breaking up. We are unable to hear the entire question. [Operator Instructions] Mr. Shah are you still there with us?
[Technical Difficulty]
Yes. Is this better?
Yes, it is better now.
Since the overseas operation, of demand we are looking in Europe and U.S. Where we are seeing.
Mr. Shah, your voice is still breaking up. We can't hear you well. We request you kindly rejoin back again?
Sure.
[Technical Difficulty]
I have more or less heard the questions. Could I make an attempt to answer? This is Raghupathy here.
Sure, sir.
Okay. Great. Thank you. Well, let me just clarify, the units -- the international unit that we are talking about are the ones which are existing in Far East, Middle East and the U.S.A. We do not have units in Europe. All the units that have been set up in their respective locations cater to the demand in those regions because they are all catering to industrial packaging requirements. And they are bulky in nature, so obviously, the manufacturing caters to the local demand. While there is definitely a certain impact of inflation that's happening, that has resulted due to the increase in the cost of the raw material and allied freight expenses, et cetera, the market continues to be buoyant. We are experienced both in Asia as well as the Middle East as well, the market continues to grow. We, in fact, have been experiencing a buoyancy in demand probably because of the fact that there has been a lot of companies to whom we have been catering to, large, robust solid companies who have been adopting China-Plus-One strategy. Options have been looked by some of these companies for sourcing from locations which are optional to China. And it has also aided to a certain extent probably by the fact that China was also under lockdown in the last couple of months as well. U.S.A. market is also very, very strong and buoyant. As far as we have heard and have been experiencing also, the demand is extremely buoyant there. Both the chemical segment and the agriculture chemical market are very strong. We have order bookings for -- at least for the rest of the year very strongly placed there. The inflations are there. The government has -- the Fed has taken steps to increase the interest rates. But admittedly, they have not had much of an impact as far as making any impact on the demand.
One question is on CNG cascades. Have you started recording revenue or not yet right now?
Yes. On the CSG Cascade, we have started manufacturing them and have started supplies also. The order booking that you have been hearing about 2 point -- INR 250 crores order booking is there. But as far as we have mentioned in this earning presentation also, as far as 2022 is concerned, we got the revenue of INR 56 crores from CNG composite cylinders. And supplies have tend to [indiscernible] already. So there are people have -- customers have already been experiencing the use of these Type-IV composite cylinder Cascades.
[Operator Instructions] We have the next question from the line of [indiscernible] from Alpha Investor.
And congratulations on good set of numbers. So I have 3 questions. Cost being the taxes between the Type-IV Cascade that we supply. Does cost, the difference between the Type-IV cylinder and the steel cylinder is almost double, right? So how do we justify the savings that we have on operating costs that are incurred? So like, for example, what kind of gas -- what quantity of gas do we carry more compared to that in the steel cylinders? Like what are the operating efficiency that we have? And second question, the follow-up of the first one. What is the cost of Type-IV cylinders versus steel cylinders? Like what is the cost today? And what was it 1 year back, considering the steel prices are also on a spike? So what is pretty much the difference? And the third question being, we are -- are we also planning to get in the onboard cylinder range? And if so, what is our future plan? And what kind of capacity? At what kind of CapEx are we planning to introduce it?
Yes. Type-IV cylinders, as we have already clarified, they are the latest range of Composite Cylinders that are available for CNG. And one of the biggest advantages that they offer over Type-I, they are extremely light in weight. So as a result of which, when you load these Cascades onto a truck, we are in a position to have a total water volume capacity which is far higher than the water volume capacity per typical steel cylinder cascade because the steel cylinder cascade cylinders, number of cylinders are limited because they are extremely heavy. In direct comparison, a standard truck, let us say, of Tata 1412, as they call it, if they are in a position to carry, let's say, 4,500 water volume capacity of type-I, as again said, we are in a position to give them a cascade which can carry a cascade in excess of 9,000 liter capacity. So this would mean that they are in a position to carry double the quantity of gas. Yes, the price of Type-IV versus the Type-I, they are definitely different. And I would put it there in the -- they are almost 3x probably more than the type-I. And -- but then the very fact that you are able to carry more quantum of gas easily offsets the additional expenditure they have to make. In fact, on a service life of 20 years that these Cascades are supposed to be delivering, you have a payback in a short period of less than half a year or 7 months. Right. Now coming to the third part of the question, when you said that onboard cylinders. That is a phenomenally large opportunity that is available. Very recently, government is also giving permission for the Euro 6 cars also to be changed from metal -- from petrol to CNG as well. So there are enough opportunities that are there. But with the limited capacity that is available with us, we are focusing on the mobile transportation of gas by way of cylinders. The next phase of expansion which we are planning would definitely include investments for manufacture of cylinders for automotive application, that both to the OEM as well as to some of these conversions, what we call as onboard cylinders. Plus, the use of these cylinders on buses, et cetera, which will also give them an opportunity to travel long distances without the need to refuel in between because they can carry more quantum of CNG gas in them, right? And the third, of course, the most important part of the CNG application is the fact that -- the mobile cascade, which we are already catering to, there is enough of demand which is currently not being met, that will also continue. So these are the 3 areas of CNG application for which the additional expansions are being planned. And the additional expansions, we will also take into account the demand for hydrogen cylinders that are also coming up. So that's another area, additional area on which we are working.
Are there any future planning that it will come in? Like by the end of FY '23 or something like that? Any time line?
Yes. Yes. In fact, we are planning to, as I mentioned in my earlier comments that consolidation and restructuring business is ongoing there. So definitely, we'll surplus funds we have. We don't want to increase the debt further as we ourselves are targeting reduce the debt by almost 50%. And for the surplus money, we will use for expansion of these composite cylinders, which in CNG as well as in LPG also. Because LPG, we had mentioned at the last time also, we have informed that we have order booking for next 2 years. 70% capacity is already sold out to the one company. And we are expanding the orders from the other gas distribution companies also. So definitely this year, we are going to invest in the value-added products and especially CNG and LPG. CNG, yes, we are targeting for the -- we are looking for the line for the composite as well as in composite hydrogen as well as CNG cylinder. So investment, we are under the discussion. And we are in the process for in the range of around INR 125 crores we are thinking so that we are targeting in the next 3 years' time, we can have a composite business itself maybe around INR 1,000 crores, including LPG and CNG. So you can understand, the CNG business, we are targeting for the next 3 years around the INR 750 crores business. For that, we have initiated with the investment because it's a reasonable EBITDA margin. It's come in the value-added products. And it will help us to reduce the working over the cycle time also.
We have the next question from the line of Anurag.
So Bharat, you just mentioned that by September, we are expecting to close the restructuring or divestment. So are we already in discussion with some investors? And any idea what kind of a valuation we can expect?
In fact, I tell you, we have appointed the 2 merchant banker. I have informed them. There is one of the JPMorgan. E&Y, they are valuing investor. They received this participant, and assessment is on. As far as this dilution part is concerned, we have left on our wealth adviser. We will come back very shortly. I can say in the next 45 to 60 days, you will come to know the name because it is we -- our merchant bankers are FIC as far as financial investor or a strategic investor, they are assessing the right people.
Okay, sir. And also, sir, you also emphasized on hydrogen cylinder in your initiative comments. So what kind of visibility do you see over the next 2, 3 years? And where you are expecting major orders? If you can throw some light on that side?
Well, frankly speaking, while I must say that the conversion of the energy to hydrogen is still pretty fluid, but there are enough signs out there in the market to confirm that there are lots of companies are investing very heavily in hydrogen, right? And that is so because of the fact that it is a net carbon-zero fuel. The only residue that's hydrogen -- on the use of hydrogen that you have is pure water. So that's an area where a lot of companies are moving. Recently, we participated in an exhibition in Delhi. I think for composite cylinders, almost 99% of the people who have participated were all in the field of hydrogen fuel itself. So that's a very clear area as there are -- I don't want to take the names of the company. But you would know that there are enough companies in India itself who have invested for manufacture of hydrogen and related to machineries as well. So this hydrogen would be used for fueling the fuel cells as well, which will be used in the automotive vehicles, et cetera. There's a lot of conventional energy like diesel and petrol, which will give way to hydrogen. So there are enough opportunities that are really coming by. That's very clearly the sign not only here, but even in Europe and even in the U.S.A. as well. So we are extremely buoyant about the opportunities that will arise due to this change of fuel.
Anurag, in addition to say, I'd like to say that the equipments, which we are in the process of finalizing for CNG, we are, in fact, also doing in such a way that we can be kept ourselves ready for hydrogen cylinder. So from the same line, we can do at least R&D part, and we can get the approvals. Things are ready, right?
Okay, sir. Okay. Understood. And sir, I think earlier calls, you have mentioned there was -- in terms of hydrogen cylinder, the pressure required will be different, et cetera. So in terms of product, are we ready? Or where in a prototype [indiscernible]
Well, the development is on at the moment. We are ready with the LPG, which has an operating pressure of 20 bar. We are ready with the CNG, which has an operating pressure of 250 bar. The burst pressure required for CNG is almost about 375 bar. So we have all surpassed all those requirements. Hydrogen is another next step in the same direction of composite cylinders. It has an operating pressure of somewhere between 350 to 700 bar depending upon how the regulator will finally fix it and would have a bus pressure over 1,000 bar. We have -- we would need some Capex to be made for the testing equipment, et cetera, the technology, the science, everything is in place. Trials that are going on in very full swing. There are people on the job. So we are very, very confident. We are almost there, I would put it this way.
Okay. And one final question, sir. On this Tesla power order of INR 100 crore, when we will start supplying? Over what period?
In fact, these order is for financial year 2022, '23. That will be supplied in the balance period, because recently, in the last 15 days, we received an order. We are in the process of providing order along with the advance. But this order is especially for DCF only.
We have the next question from the line of Vikram.
Yes. Sir, can you give, I think your outlook on pipe business, and how the raw material volatility is impacting. So in terms of growth as well as the margin outlook on pipe business.
Yes. I think you have seen that pipe business in 2021, we had done business of INR 170 crores. This '22, we did INR 190 crores. As against our capacity, yes, from the capacity wise, we can do business of INR 450 crores. But this last specifically because of the -- and recently in the last 4, 5 months, prices have increased substantially. And this business is a fixed price system for EPC contractor. We have asked them to increase the prices. They have submitted their proposal to the respective authorities, which were in process. But as far as this year outlook is concerned, yes, demand is there, market is there, but the limitation is the price, and we should get our re-evaluation. But definitely, this current year, of course, we are looking for increasing the utilization. And we are expecting as far as this current year is concerned, as against INR 190 crores, definitely, we are projecting a business in the range of around INR 230 crores.
Got it. Yes. In terms of IBC and all to the way you're seeing...
I can say this year, as far as -- we are targeting growth -- all over growth -- revenue growth of around 20%, we are targeting this year. As far as Indian business are concerned, overseas business, as we mentioned, is the consolidation is going place. So India business is currently in the range of around INR 2,500 crores. That's going to be continued, and we'll achieve a growth of around 20%.
Right, sir.
And probably there will be increase in the margin also as the percentage of value-added products are increasing. So there will be some expansion in the EBITDA margins also.
And how is the situation on working capital with the -- and are we seeing some impact of the supply chain disturbance because of that? So if you can comment on that, I think that will be...
That's right. That's a good question. You have seen in the last quarter, prices of polymer has increased by almost 15%. But as we've seen now slowly, slowly, it is coming and stabilizing prices. So I think by September, some working capital improvement must be there as far as price and realization part is concerned. And as we are targeting, as I mentioned in my -- this earning presentation also, we'll come back to the working capital cycle time of 90 days in the next 12 months' time. Because the value-added business product will increase, where the working capital cycle time is less and the business of the pipe is less, so they will give the substantial [indiscernible] as far as working capital parts are concerned. And you were asking about the EBITDA margin as far as peak by business, always within the range of 10% to 11.5%. But value-added products, EBITDA margin in the range of around 18%.
Got it. So I think with the kind of growth and the control on working capital, probably our ROCE target will...
I think [indiscernible] because ROCE, we have seen the current year will be increased to 12.7% as against 9% previous year because of the COVID infection was there. But we are targeting in the next 3 years, ROCE should reach to the 19% and the value-added percentage business will go up. In fact, we ourselves are targeting in the next 3 years' time, the value-added product will have, which currently is 20%, and which is going to be increased to 35%, and 65% from the established products. So definitely, whenever the percentage of value-added product will increase, the working of the cycle time will improve, ROCE will also improve. So we are targeting our internal target to achieve ROCE of around 19% by 2025.
[Operator Instructions] We have the next question from the line of [ Suresh Varun ] an individual investor.
[Foreign Language] Yes. Okay. Still, what about large PE pipe [indiscernible] when we are expecting to recover actually? You know every quarter you said that there is a drag on this division.
Yes, I agree with you because business is there. I don't say the business is not there. But we're always worried about to keep ourselves margin what we needed. Last -- in fact, I should say last 4, 5 months affected pipe business, because initially, first 6 months, there was a problem of getting the realization from the customer because EPC contractor was not getting the money from the government authorities. But now in the month of October, November, they have released the money. But again, then after the prices have increased substantially. So there is -- to maintain our EBITDA margin in the range of 10% to 11%, their EPC contract has gone back to the government authorities. And they are considering because in government also is -- would like to have their infrastructure development on the fast scale. So I am very clear this business -- because there's any season, in fact, in any case, pipe business is not take much -- because the ground, they cannot do the ground level work. But I'm sure, as we are projecting as INR 190 crore business we did this year, but definitely, more than 25% to 30% growth we can expect this year with our expected pipe realization.
Okay, sir. Okay, sir. And the next, still, we are in divestment of plastic division. And now we are got out of our battery division. So are we still looking for divestment of these centers?
We have not closed at any time. In fact, we are open. But at the same time, we are getting good orders [indiscernible] business in battery segment. We are still open because we in fact as the business from -- we can do the potential for business of the battery segment, as with existing investment, we can do revenue of around INR 300 crores. This year, we are estimating around 60% level. But again, yes, if all the parties interested, we have done recently good development in battery segment also. My people are working out lithium-ion batteries for 2-wheelers. Development is already on. They have actual [indiscernible] center. They are submitting to government authority, they have the approval. And I think that we will have maybe in the next 60 to 90 days time, good development as far as [indiscernible] battery is ongoing.
Ok sir. And the [indiscernible] business.
Plastic?
Yeah plastic [indiscernible]
So that impact, in any case, we have exited already. And some of the -- you have seen that as held for sale, which was around INR 60 crores value we had churn. And without of that, we have already disposed off assets, some of the machineries of around INR 7 crores. And balance, our discussion is on already. So we have already exited from them because the machinery we can use for our value-added products. And most, yes, we are in the process of talking and we are giving the [indiscernible] to be interested party. We are already exited from that businesses.
Okay. Okay, sir. And sir, any update on oxygen now? You are discussing about hydrogen. Any update on oxygen cylinder now any order book or any approval?
In fact, orders are there. But we are not currently executing because we have a long order book for the CNG cylinders. And here, yes, but oxygen cylinders, yes, we are still in process because we are developing the oxygen cylinder in such a way which can be used at the home. It is nothing to do with the corona this COVID period. It can be -- always can be used, hospital sectors can be used. But development is on. We have not yet completed our samples to the authorities for the approval because internal task is ongoing still.
Okay, sir. Okay. And sir, how much CNG cylinder or a [indiscernible] cylinder with order tender in pipeline for the next 2022, '23, sir?
I tell you, as you have seen, we have given that we have a order book of INR 250 crores already. And last year, we executed around INR 58 crores. So this year already things to eat on the plate, okay? So we'll definitely bring some expansion this year. So next year, definitely, we can -- as I mentioned to you, in the next 3 years, and we are keeping the target of INR 750 crores business. So this year investment, we will for around INR 100 crores to INR 125 crores, that will give us the fruit next year.
Okay, sir. So how much -- did we quote for any tender recently? Can you disclose some value? How much we quoted?
In fact, small tender come by [indiscernible] intimate because big orders when we have received INR 100 crores order, we have informed them. And as you have seen earlier, when we have reported that INR 280 crores order book was there. Out of that, we have attributed INR 60 crores, bulk of the value already executed. So 2020, then another INR 30 crores or [indiscernible] orders itself is there. That we ourselves are keeping and restricting to take the order because prices have increased substantially. And we also would like to take CNG orders at a higher price because then we get the orders, then we have to review the whole price. So we are also watching the prices. And another thing is when restrictions come in the inputs, which is required to use for the CNG cylinder. So that also already we have finalized. And I think we are all -- and this year, as we are projecting business of around INR 250 crores for the CNG cylinder. So we make any good order booking as far as [indiscernible] is concerned.
Okay, sir. Okay. Sir, before actually, the stress that in USA, this potential to achieve 50 million revenue. How much revenue you achieved, sir, this year so far in the U.S.? You are only specific.
You are only specific. No, we can achieve the existing investment when the plant runs in the 90% in capacity, we can achieve the 50% -- 15 million revenue. But yes, that is achievable in the 90% utilization. But as U.S. we have seen, it is the -- this year, we are going to get around 45 million to 50 million revenue. This year, we will get it.
We have the next question from the line of [indiscernible] an individual investor.
And congrats for the good set of results. When you talk about overseas divestments, are you also referring to your Sharjah operations?
Overseas investment, I tell you as we have a project in 10 countries, including India, 11 countries. So yes, it's overseas operations we talk -- when we talk. The entire overseas operation, and Sharjah will also be included in the overseas operations.
My question was because Sharjah operation seems to be already quite efficient, like you don't need to infuse a lot of capital. And it produces quite a bit of profits. So why are you considering divesting a part stake in that?
No, in fact, at that point, is the total block, I can say, the overseas businesses when the investor is looking after the global business because we have some items like we say, we have a...
That makes sense. So as a portfolio, it would make more sense for a strategy...
But I cannot give more choice to them. I know my choice is I cannot take the [ 3 ] supplies which is running full and I did not panic. It will include it in all the things.
Perfect. My next question is on your onboard CNG cylinder. You think like what is the current focus of the company? Is it more towards OEMs or towards aftermarket?
As I mentioned earlier, the focus of the -- on the CNG business is for mobile cascade options. They are basically would be applied to all the CGD companies. The automotive and the rest of the market will have to wait for the expansions to take place.
So then my question was because there seems to be a big opportunity now, especially in the CNG onboard for vehicles, for [ 4 ] dealers. So why has the marketing focus not being also on that segment? Is it too much to bite?
Yes, the marketing focus is very much there. There are companies who have been conventionally using Type-I cylinders. OEMs take their own sweet time to get shipped from one technology to the other. These samples have been submitted. The trials are going on. It's a very long-drawn process for any OEM to kind of validate this part of it, even though it might be quite successful in other countries. So we are very much on the job. There is a good amount of focus there. The expenses have also been taken into consideration, the requirement that will be coming from the OEM sector.
We have the next question from the line of Anurag Patil from Roha Asset.
Sir, you mentioned INR 125 crore CapEx. So does that include the earlier INR 90 crore announced?
No, no. LPG in the separate capacity expansion, which we had mentioned, that we will look after in the second half of the year, because my current capacity is 1.4 million cylinder LPG where we can have a different sizes of the cylinder. Therefore, 1 million cylinders we can produce it. Out of that, 70% is book. Balance, 30%, we are utilizing for export to the other countries and taking care of the other customer. But yes, this order is for 2 years. So definitely, expansion in LPG is our life, but we are just watching on other gas distribution companies also [indiscernible] And we will receive what their tender will come up. Then we will think about expansion in LPG cylinder. But if you have heard our previous conference call, expansion in LPG cylinder takes maximum 6 month, I can say because we have expertise of the 2 product installed and commissioned in India. So it will take highly 5 to 6 months' time will enhance the capacity. So we have well experienced team. So we are just watching how the demand is coming up, internationally and locally.
Okay. So if there are further tenders and demand is there, then you will go for additional INR 125 crore CapEx? Am I correct?
No, no. You have asked me about the LPG. CNG is already there. We have to go for the expansion to meet the market demand because already order book is more than INR 250 crores, with my existing investment, maximum because certain investment during '21, '22. We had done investment in '20 '21. So current business, I can do maximum of around [ INR 120 crore to INR 130 crores ]. But we have an order book of INR 450 crores. Therefore, for CNG and mix of some hydraulic testing equipment also, we are planning for INR 125 crore capacity this year.
So what for LPG [indiscernible]
You mean CapEx, yes.
Okay, sir. Okay. Understood. And sir, now that we are divesting the overseas business and you have a very strong visibility in the domestic side. So [indiscernible] used to guide some 15% CAGR for the next 3 years. So can we say now 20% CAGR is possible?
As far as volume, I can say more than 15%. As far as revenue part is concerned, we've [indiscernible] with the prices of the polymer. But yes, you can see the -- conservative way, you can take the CAGR of 15%, 15% to 18%, you can take it.
[Operator Instructions] We have the next question from the line of [indiscernible] Alpha Investor.
I just had one follow-up question. The INR 125 crore CapEx that we are talking on, from the CNG point of view, what is the capacity in terms of quantity that we are expecting? Like what -- by what time -- what are we expecting?
I tell you as -- if I invest INR 1, I can get the revenue of 2.5x. If I'm investing INR 125 crores, so in Cascade business and cylinder business, we can have a revenue of around more than INR 300 crores.
Okay. Sir, in volume terms, did you talk?
Volume terms, why I cannot say because there'll be different sizes of filings are there. Okay? Because 60 liters, 156 liters, there are the different sizes of the thing they are there. So number of the cylinders, depending on the size, we will take. Revenue-wise, I can say, yes, more than 2.5x revenue can be generated. And with the reasonable value-added product margin, which we had mentioned, is in the range of around 18%.
Okay. So sir, this particular INR 125 crores that is getting into CapEx is not pertaining to one particular capacity? That is the cascade, right? It is in general?
It is in general, for expansion in CNG products, in which we had included some equipment for the development of the hydrogen cylinders also.
[Operator Instructions] As we have no further questions, I would now like to hand the conference over to the management for closing comments.
So thank you very much to my all valued investor for listening the management comments. We will see you again and comments about the next quarter. Thank you very much.
Thank you. On behalf of PhillipCapital, that concludes the conference. Thank you for joining us, and you may now disconnect your lines.