Technocrat Industries -
Q1 FY 25 results and concall highlights -
Revenues - 620 vs 556 cr, up 11 pc
EBITDA - 146 vs 145 cr ( margins @ 24 vs 26 pc )
PAT - 84 vs 91 cr
Segment wise revenues -
Drum closures - 151 vs 127 cr, up 18 pc
Scaffoldings and Formworks - 334 vs 274 cr, up 22 pc
Textiles division - 104 vs 139 cr, down 25 pc
Engineering and Design services - 49 vs 42 cr, up 18 pc
Segment wise EBIT -
Drum closures - 55 vs 40 cr, up 38 pc
Scaffoldings and Formworks - 53 vs 77 cr, down 31 pc
Textiles - (-) 12 vs (-) 4 cr
Engineering and Design services - 8 vs 9 cr
Company is hopeful of an improved performance in the Drum Closure division. No major capex ( except maint capex ) planned in this division
Company is confident about a margin revival in Scaffoldings and Formwork division because of anticipated growth in infrastructure and housing led demand in India. Company’s 02 plants in Aurangabad to make 17,500 MT of Aluminium Extrusion and 6,00,000 Sq Mtr of Aluminium fabrication has commenced production in Q1 ( a reason for lower EBIT in this segment due higher depreciation ) . They will be ramped up over the course of FY 25
Expecting the demand for engineering and design services to remain strong due to the strong acceptance of their offshore global delivery model
Company is the second largest drum closure manufacturer in the world, currently exporting to 75 countries. Company is guiding for single digit growth in this segment but the margins will sustain in > 30 pc band
Because of commercialisation of the Aurangabad facility, company expects incremental topline of 450 cr and EBIT of 80 cr for FY 26. For FY 25, incremental topline and EBIT should be 60 cr and 10-15 cr respectively
The scaffolding business continues to be soft in Europe. However, demand from US is descent
In the textiles business, company has commissioned a new spinning unit in May. Revenue from that will start to flow in Q2 whereas the expenses started to come in Q1. From Q2 onwards, company sees a descent uptick in the textiles business. For full FY, should add around 130 cr of topline to the yarn business. All textiles divisions combines ( Yarn + Fabric + Garments ), topline should be around 650 cr
Also expecting the textiles division ( Yarn + Garments + Fabric divisions ) to be EBITDA positive for this FY ( EBITDA percentage in the range of 8-10 pc )
Company is still awaiting - B certification in Europe for its Scaffolding business. They are expected to get it sometime in Sep
Aluminium formwork’s demand continues to outstrip supply ( despite having local and Chinese competition ). Local demand is so good that the company is not even able to export this product. Company’s current Mkt share in India is around 10 pc or so
Company’s steel formwork business did witness softness in demand in Q1 - because of the elections. Should pick up going forward. However, company’s main thrust and bulk of the business continues to come from Aluminium formwork. ( Steel formwork is mainly used for Infra projects while Aluminium formwork is mainly used in Real Estate sector )
Company sees very good demand outlook for its MAK-1 - aluminium formwork business - both from domestic and export markets for next 2-3 yrs
LY, company’s scaffolding + Formwork division did revenues of 1030 cr. This yr, company is expecting to do around 1250 cr and next year, they are expecting to do > 1800 cr from this segment ( because of the new capacity coming online )
For engineering services segment, expecting to do 20-25 pc CAGR topline growth for next 2-3 yrs
Expecting to touch a PBT of 500 cr for FY 25
Disc : holding, biased, not SEBI registered, not a buy / sell recommendation