Indian Toners & Developers Ltd - Research Report


Private Client Research






Indian Toners & Developers Ltd

Reco Price
Rs. 90.5
Price Target (12 Months)
Rs. 170


15 january 2015
CNX Nifty




Cash rich company with no debts in book and strong revenue growth will aid further re rating in the stock.

Market leader in a niche space:
Toner powder looks to be a very niche space. The company has been manufacturing this product for more than 20 years and has created a name in the industry. The company has a very strong focus on quality which has enabled it to stay in the market and create a name for itself. The company is one of the few companies manufacturing toner powder in India and other players are usually importing from other international markets. Indian Toners & Developers Ltd. (I.T.D.L) is India’s largest manufacturer and exporter of compatible toners for use in laser printers, the new age digital machines, multi-function printers, analogue copiers as well as wide format printers and copiers. Indian Toners & Developers Ltd. also offers premium quality chemical color toners for use in laser printers and copiers.

Strong Subsidiary:
Indian Toners formed a subsidiary by the name of ITDL Imagetec Limited, which became operational since beginning 2009. While the manufacturing plant of the parent company i.e. Indian Toners is located in Rampur (U.P.), the manufacturing facility of its subsidiary, ITDL Imagetec, is located at Sitarganj (Uttarakhand). Indian Toners & Developers Ltd has a manufacturing capacity to produce 2400 metric tons of toners per annum. The facility at Rampur has a manufacturing capacity of 1200 metric tons of toner per annum, while the facility at Sitargunj also has a manufacturing capacity of 1200 metric tons of toner per annum, with a total of 4 production lines (600 metric tons each). The production capacity is being enhanced to 3000 metric tons and expansion will be completed before this year end. Hence company will have strong capacity on stream where they can improve their production to meet future demand.

Strong Quality standards:
I.T.D.L. Toners are manufactured and examined under strict quality control standards. At each critical stage of production every batch is subjected to rigorous testing before being released by the company’s Quality Assurance Dept. Various important key parameters of toners such as particle size & size distribution, tribo-change, relative dielectric constant, specific DC resistivity, flow ability, melt flow index, magnetic properties, etc. are evaluated and tightly controlled. The quality controls of the products also include long term tests concerning copy quality, compatibility, influence on the function and maintenance of the copier and printer. Hence company’s product is most preferred products compare to china and surat manufactured products, Normally ITDL products are sold at Rs 700/kg in branded segment compare to 600/kg by Surat manufacturers and Rs 450/kg by Chinese manufacturers.

Strong Client base:
The Company manufactures compatible toners for use in Brother, Canon, Toshiba, Hewlett-Packard, Kip, Panasonic, Ricoh, Konica Minolta, Kyocera Mita, Lexmark, Samsung, Sharp and Xerox. It distributes its products through brand such as Supremo. ITDL exports toners to more than 30 countries across the world. Companies have plans to increase their presence in the Russian and Ukrainian markets, for which they are planning to hire a local representatives present in those markets.

Strong Financials:
Over the last 5 the company has increased its PAT at CAGR of 27%. EBITDA margins have expanded sharply from 14% in FY09 to 24.6% in FY14. Company’s products are higher in prices with range of 25-35%.. Another reason for the company for strong bottom line growth is scale benefits as there is a sharp decline in other costs and employee costs. The company also gets some tax benefit in their Sitarganj Plant in Uttarakhand. With cash and cash equivalent of Rs 51.20/ share which is more than 48% of current market share, Company is cash rich company with no debts in book. Company is generating strong operating cashflow of Rs 19.42 crores and with ROCE of 33.19% and ROE of 29.45%. Hence Company has very strong financials compare to its peers in industry.

Key risk:
The few concern, we have is that in spite of making decent profit, the company is not paying dividend and majority of profit is generated at subsidiary level where parent company has 51% stake. Also, most of the revenues (almost 100%) are coming from export, and hence frequent and wide fluctuations in foreign currency and tough competition in the international market continues to be a challenge for your company.

Stock Data

CMP (Rs)
Face value (Rs)
52 Week Range (Rs)
116.45 - 16.20
Market cap (Rs Crores)
Price To Book Value (x)
P/E Ratio (x)

One Year indexed Stock Performance

Indian Toners & Developers LtdSensex
Indian Toners & Developers Ltd
Performance (%)


(in %)

+91 22 6639 3000



The growth of toner industry is expected to grow with expected rise in shipping volume of hardware (copier/MFP, laser/LED printer, laser/LED fax and production printer) and increase in printing volume. The regions where shipment volume is expected to grow are emerging market countries such as China, South East Asia, India and Brazil. Even though the growth rate may differ from countries, increasing population and expansion of infrastructure are seemed to cover the deficit from developed countries. Potential demand is high in these regions, but low-end machines are preferred and high priced high-end machines such as A3 MFP and color devices are not sold well. In order to expand basic demand, manufacturers are marketing low end devices so far and believe that the need of high end machines like A3 MFP and color MFP will follow.


Indian Toners & Developers Ltd (ITDL) is a toner manufacturer. The company produces and exports compatible toners for photocopiers, laser printers, digital machines and multifunction printers. It offers products such as chemical color toner, laser toner, copier or digital toner, wide format copier and printer toner. ITDL offers packaging services to its customers. The company manufactures compatible toners for use in Brother, Canon, Toshiba, Hewlett-Packard, Kip, Panasonic, Ricoh, Konica Minolta, Kyocera Mita, Lexmark, Oce, Samsung, Sharp and Xerox. It distributes its products through brand such as Supremo. ITDL exports toners to more than thirty countries across the world. ITDL is headquartered in New Delhi, India.

Profit & Loss Statement:- (Consolidated)
(Rs Crores)
  • Net Sales
  • Growth
  • Total Expenditure
  • EBIDTA Margin (%)
  • Other Income
  • Operating Profit
  • Interest
  • PBDT
  • Depreciation
  • Profit Before Taxation & Exceptional Items
  • Exceptional Income / Expenses
  • Profit Before Tax
  • Provision for Tax
  • Profit After Tax
  • Minority Interest
  • PAT after Minority Interest
  • Adjusted EPS
  • 64.46
  • -
  • 53.99
  • 10.47
  • 16.25
  • 1.92
  • 12.39
  • 0.42
  • 11.98
  • 2.08
  • 9.90
  • -0.23
  • 9.67
  • 1.82
  • 7.85
  • -2.58
  • 5.27
  • 6.54
  • 70.96
  • 10.08
  • 56.89
  • 14.07
  • 19.83
  • 1.39
  • 15.46
  • 0.54
  • 14.92
  • 2.16
  • 12.76
  • -0.25
  • 12.51
  • 1.57
  • 10.95
  • -4.33
  • 6.62
  • 8.21
  • 87.58
  • 23.42
  • 66.52
  • 21.06
  • 24.05
  • 1.50
  • 22.56
  • 0.52
  • 22.04
  • 2.31
  • 19.73
  • -0.29
  • 19.44
  • 1.77
  • 17.67
  • -6.13
  • 11.54
  • 14.32
  • 108.95
  • 24.40
  • 81.50
  • 27.45
  • 25.20
  • 1.55
  • 29.00
  • 0.50
  • 28.50
  • 2.50
  • 26.00
  • -0.20
  • 25.80
  • 2.65
  • 23.15
  • -8.20
  • 14.95
  • 18.55
  • 136.50
  • 25.29
  • 102.50
  • 34.00
  • 24.91
  • 1.55
  • 35.55
  • 0.50
  • 35.05
  • 2.85
  • 32.20
  • -0.20
  • 32.00
  • 3.55
  • 28.45
  • -10.50
  • 17.95
  • 22.28
  • 172.58
  • 26.43
  • 130.50
  • 42.08
  • 24.38
  • 1.55
  • 43.63
  • 0.50
  • 43.13
  • 2.95
  • 40.18
  • -0.20
  • 39.98
  • 4.70
  • 35.28
  • -12.50
  • 22.78
  • 28.27
Source: Stockaxis Research, Company Data


Company has market share of more than 25% in organize market where their products are considered as a premium products in market. With cash and cash equivalent of Rs 51.20/ share, Company is cash rich with no debts in book and strong revenue growth will help for further re rating of the stock. Hence we recommend buy on the stock with target price of Rs 170 trailing at P/E of 6.01x at FY2017E which is very reasonable valuation for the stock with time horizon of more than one year.



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