Technocraft Industries -
Q4 and FY 24 concall and results updates -
Company’s Business segments, FY 24 revenues, EBIT margins -
Drum Closures - 543 vs 534 cr YoY, operated @ 34 vs 30 pc EBIT margins YoY
Scaffolding and Formwork - 1032 vs 889 cr YoY, operated at 18 vs 26 pc EBIT margins YoY. This is likely to reverse in FY 25
Manufacturing of Cotton Yarn, Fabric and Garments - 491 vs 534 cr YoY, operated at (-)4 pc vs (-) 7 pc EBIT margins YoY
Engineering and Design Services - 198 vs 135 cr YoY, operated at 19 vs 20 pc EBIT margins YoY
Company’s new Aluminium extrusion and fabrication plant at Aurangabad with a capacity of 17,500 MT and 6 lakh Sq Mar has gone live in Mar 24. As this facility ramps up, results from this plant should be visible in FY 25 ( in Q4 - basically, full effects will be visible in FY 26 ). Total capex required here should be around 280-300 cr. This should result in incremental revenues of 400-500 cr for the company ( most likely in FY 26 - after the full ramp up )
Seeing strong demand uptick in the Scaffolding and Formwork business from US, Middle East and Indian Mkts in Q1. Company is ramping up capacity to meet the increased demand. Expecting further acceleration in Indian demand after the election uncertainty is over
Sustainable EBITDA margins in Scaffolding are around 20 pc and 15 pc for Formwork
Company has shifted most of their Textiles business from Mumbai to Aurangabad. Aurangabad is a low cost destination wrt doing business. Plus there is a global recovery ( post COVID led overstocking ) in the Textiles business. Company feels that a turnaround in their textiles business should only be around the corner
Most of company’s Scaffolding exports are targeted at US ( 90 pc of exports ) vs only 10 pc of exports to Europe. Company lacks a key certification that’s required to sell in Europe. If that certification comes through in next 3-4 months, company can ramp up their European business as well. If this happens, the EU business can be as big as their US business
Also expecting descent growth to continue in the engineering and design business
Company has not even started tapping the export demand for Aluminium formwork from geographies like - Africa, LATAM. Will venture out there once the new Aurangabad facility comes fully on stream
Guiding for a topline growth of > 20 pc for FY 25 and FY 26. Also guiding for an EBITDA margin of 19-20 pc for FY 25
Other players are also putting up Aluminium formwork capacities in India. However, the demand is outpacing the supply. Also, Technocraft is one of the few companies that are also backward integrating into Aluminium Extrusions. This should give them a competitive advantage
Company has also entered into plastic drum closure business. Margins here are similar to steel drum closures. Also, the application areas of steel and plastic drum closures are completely different
Company has developed a special device used to cool down the seeker head of Air-Air, Surface - Air missiles (cools it down below (-) 150 degrees within seconds). Company is the sole Indian Producer for this device. Supplies should start shortly. Although wrt company’s size, this may ( at present ) not be a big revenue driver
Disc: holding, biased, not SEBI registered
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