Technocraft Industries Navigates Global Headwinds with Robust Q2 FY26 Performance

Technocraft Industries (India) Limited has reported a resilient performance for the second quarter of Fiscal Year 2026, demonstrating strong operational execution amidst a challenging global economic landscape. The diversified industrial group, known for its presence in drum closures, scaffolding systems, textiles, and engineering services, posted a consolidated revenue of INR 752 crore for the July-September 2025 quarter. This represents a commendable 20% year-on-year growth, underscoring the company's ability to expand its top line. Profit Before Tax (PBT) also saw a healthy increase of 9%, reaching INR 101.28 crore, while EBITDA grew by 10% to INR 145.17 crore. The management highlighted that all four divisions contributed positively, reflecting a balanced growth trajectory despite prevailing market turbulences.

The company's segmental analysis reveals a dynamic interplay of growth drivers and external pressures. The Scaffolding Division emerged as the primary growth engine, with revenue surging by 34% year-on-year to INR 401.96 crore. This robust performance was largely fueled by strong domestic demand and significant sales from its Mach One products. The newly operational Aluminum Extrusion manufacturing unit in Aurangabad has already become profitable, exceeding initial targets and contributing positively to both revenue and margins. In contrast, the Drum Closure Division experienced a marginal revenue decrease of 1% to INR 155.34 crore, with profitability impacted by a 50% US tariff, of which only half could be passed on to customers. The Textiles Division saw a modest 2% revenue growth to INR 142.32 crore, while the Engineering & Designing Services segment delivered a strong 30% revenue increase to INR 67.32 crore, driven by new customer acquisitions and ramp-up of larger accounts.

Strategic Initiatives and Market Dynamics

Technocraft is actively pursuing several strategic initiatives to sustain its growth momentum and mitigate risks. The company has launched new scaffolding products, including Manto panels for global markets and specialized shoring systems, expanding its product portfolio. The successful ramp-up of the Aurangabad Aluminum Extrusion plant is a testament to its execution capabilities, with plans to double its capacity by 2027, entailing a capital expenditure of approximately INR 150 crore. This expansion is crucial to address the robust domestic demand for formwork, which currently exceeds the company's capacity.

However, the company acknowledges significant headwinds in international markets. The US scaffolding market experienced a 45-50% reduction in demand from July to October due to tariff uncertainties, which is expected to impact the third-quarter results. Similarly, the European market for scaffolding has seen a slow pickup, with the economy remaining soft. Despite these challenges, Technocraft is optimistic about a potential trade deal in the US and has observed some pickup in demand in November. The company is also focusing on diversifying its textile market presence and shifting towards value-added products to de-risk global uncertainties and improve profitability.

Outlook and Investor Confidence

Management's commentary reflects a balanced and pragmatic outlook. They are confident in achieving the INR 900 crore revenue target for the formwork division this year and expect the ER&D division to reach a quarterly revenue run rate of INR 75-80 crore by Q4. The textile division is projected to achieve breakeven to slightly positive EBIT levels by year-end, with a strategic shift towards value-added products and market diversification. The company's strong credit ratings (CRISIL AA-/Stable and CRISIL A1+) underscore its financial stability and disciplined capital allocation.

Technocraft Industries continues to demonstrate resilience and strategic foresight, adapting to global market dynamics while capitalizing on domestic growth opportunities. The focus on capacity expansion, product innovation, and market diversification positions the company for sustained performance, reinforcing investor confidence in its long-term trajectory.