| Technocraft Industries India Limited | ||||||
| Ratings reaffirmed at 'Crisil AA- / Stable / Crisil A1+ ' | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has reaffirmed its ‘Crisil AA-/Stable/Crisil A1+’ ratings on the bank facilities of Technocraft Industries India Limited (TIIL).
The ratings continue to reflect the healthy business risk profile of TIIL, supported by diversification across the drum closure, scaffolding and textile segments, strengthened product portfolio through increasing contribution of value-added products in the scaffolding and formworks segment, and steady overall business growth, leading to stable operating efficiency. With ~65% of its total revenue derived from the global market, the company has maintained its operating performance driven by strong market position and technical expertise in the drum closure and scaffolding segments. Furthermore, the financial risk profile remains healthy at the back of healthy cash accrual, no major cash commitments in the medium term and prudent cash flow management.
Revenue grew ~19% on-year to Rs 2,596 crore in fiscal 2025 led by growth across all the segments, with 21% growth in its scaffolding segment (~48% of revenue), 13% growth in its drum closures segment (~24% of revenue) and 29% growth in textiles (20% of revenue). For the nine months ended December 31, 2025, the company’s revenue grew 8% on year to Rs 2,047 crore supported by growth in its scaffolding segment (9% on-year growth) on account of commissioning of additional capacities for formworks and extrusion facilities (set up in two wholly owned subsidiaries — Technocraft Formworks Pvt Ltd and Technocraft Extrusions Pvt Ltd). The growth slowed down in the third quarter of fiscal 2026 (2.8% growth) due to decline in volume on account of the US tariffs (raised to 50% in August 2025), with drum closure and scaffolding segments showing flat growth in the nine months through December 2025 and fabric business witnessing decline. With reduction of tariffs from February 2026 to 15% on account of the US Supreme Court ruling, the demand is expected to improve with pick up in volume.
The operating margin, meanwhile, stood at 16% in fiscal 2025 and remained stable at 16% for the nine months ended December 31, 2025, on the back of decline in loss of textiles division on account of various cost cutting initiatives undertaken and healthy margin maintained in drum closure division. Although, margin in the scaffolding segment has moderated by 250-300 basis points due to the US tariffs (of 50% on steel) — with half of the segment sales to the US, and time taken to pass on the tariffs. In the medium term, margin is expected to be 14–16%, slight moderation can be seen due to rise in commodity prices and freight costs on account of the ongoing Middle East conflicts and uncertainty around the same. However, the company remains minimally impacted as it has lower than 5% exposure towards Middle East countries and natural gas component is minimal as a percentage of overall cost of goods sold (COGS). Also, the company can shift to alternate fuels on an immediate basis in case the need arises. That said, any major impact on TIIL due to the global events will monitorable.
The financial risk profile remains comfortable supported by healthy capital structure as reflected in networth of Rs 1,756 crore and net debt of Rs 227 crore as on March 31, 2025. Capacity additions across its scaffolding and textile divisions were completed in fiscal 2024 and fiscal 2025, of ~Rs 550 crore funded partly by debt (~40%) and remaining through internal accrual. Despite the additional debt, the gearing is expected to remain below 0.5 time and the cash accrual is expected to be above Rs 300 crore over the medium term, strengthening the financial risk profile. Any further significant debt-funded capital expenditure (capex) increased working capital intensity or significant cash outflow through buyback/dividend will be key rating sensitivity factor.
The ratings continue to reflect the established market position of TIIL in the drum closure industry and its increasing market share in the scaffolding industry. The ratings also factor in the stable overall operating performance and healthy financial risk profile of the company. These strengths are partially offset by weak operating performance of the yarn and fabric division and the company’s susceptibility to volatility in raw material prices and fluctuation in foreign exchange (forex) rates. |
Analytical Approach Crisil Ratings has combined the business and financial risk profiles of TIIL, its domestic and foreign subsidiaries, step-down subsidiaries, limited liability partnership and joint ventures because of strong financial and operational linkages among the entities.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Established market position in the international drum closure industry and increasing market share in the scaffolding industry and extensive experience of promoters: TIIL is a leading manufacturer of drum closures with a worldwide market share of 35–40%, excluding China, and caters to major drum manufacturers. It is reputed globally for its quality and wide range of products and supplies to leading drum and drum part manufacturers in the world, including B-POL, Drum Parts Inc, Mauser Group worldwide, Schutz Group worldwide and August Berger Metallwarent GmbH. The major end-user industries are oil and gas, packaging, chemicals, and food and beverages.
The scaffolding segment comprises scaffolding and formwork business with half of segment’s revenue accrued from the overseas market. The company has started manufacturing sophisticated engineered formwork systems for building, construction and infrastructure projects. It supplies to diversified industries including oil and gas, power, refineries, petrochemical, infrastructure and commercial construction. Additionally, the promoters are vastly experienced and have steadily scaled up the business over past five decades, in a risk averse manner.
Healthy operating performance Revenue grew 19% on-year to Rs 2,596 crore in fiscal 2025 and further grew at 8% on-year in for the first nine months of fiscal 2026. Growth in fiscal 2025 was led by all divisions with scaffolding growing by 21% on-year, textiles by 29% and drum closures by 13%, led by revival in demand. In the first nine months of fiscal 2026, the growth has slowed down due to the effect of the US tariffs which affected revenue of the third quarter of fiscal 2026 (2.8% on-year growth). Despite tariffs, scaffoldings segment grew by 9% on-year for the first nine months of fiscal 2026 at the back of commissioning of additional capacities of formworks. Drum closure division has shown flat growth in the first nine months of fiscal 2026 due to subdued demand led by the US tariffs, with one-third of revenue coming from the US for this segment. The performance of the fabric (textile division) remains weak amid subdued demand, mainly in the overseas market. Loss from the division has reduced with growth in the yarn business and cost optimisation undertaken at plants. The revenue growth is expected to remain steady as tariffs have also been reduced and demand has been improving. Healthy operating efficiency is reflected in the operating margin of 16% in fiscal 2025 and nine months through December 2025, which although remains lower from 19% in fiscal 2024 on the back of increased raw material costs. TIIL is expected to pass on increased prices to the customers resulting in stable margin. That said, imposition of tariffs and impact of ongoing global conflicts on one or more segments (for TIIL) will be monitorable.
Strong financial risk profile: The financial risk profile is supported by healthy networth and strong debt protection metrics. The networth rose to Rs 1,756 crore as on March 31, 2025, from Rs 1,656 crore a year earlier, driven by steady accretion to reserve. Debt protection metrics remained stable with net cash accrual to total debt and interest coverage ratio of 0.42 time and 8.7 times, respectively, in fiscal 2025. Term debt increased to Rs 200 crore as on March 31, 2025, due to capacity additions done in scaffolding, formworks and textiles division with partial debt funding. Still, the debt protection metrics will remain comfortable with gearing below 0.5 time and interest coverage ratio of 7-8 times. Furthermore, there are no major plans of undertaking debt as the capex is not expected to be significant and is estimated to be Rs 80-100 crore annually. However, more-than-expected debt addition for capex, acquisitions or working capital management, weakening the debt protection metrics, will remain monitorable. |
Key Rating Drivers - Weaknesses Weak operating performance of the yarn and fabric division: The yarn and fabric industry in India is highly competitive and dependent on exports to neighbouring countries such as China and Bangladesh. Given its portfolio of products with limited value addition, TIIL is susceptible to volatility in demand and spreads affecting profitability. Following the completion of upgrade and capacity expansion, the performance of the textile division is monitorable.
Susceptibility to volatility in raw material prices and fluctuation in forex rates: Key raw materials, steel and cotton, account for over 70% consumption. Consequently, profitability is susceptible to fluctuation in steel, and cotton and yarn prices. While the drum closure business is more resilient owing to value-addition, and strong cost and technology competitiveness, the scaffoldings and yarn businesses, which use steel and cotton, respectively, as key raw materials are likely to be impacted more by the volatility in the commodity prices. |
Liquidity Strong TIIL enjoys healthy liquidity led by cash accrual of Rs 355 crore in fiscal 2025 and expected Rs 300–400 crore in the medium term. Also, it has cash and equivalents (including investments) of Rs 619 crore as on September 30, 2025. Fund-based utilisation was at 80% on average for the 12 months through December 2025, calculated against drawing power. Annual cash accrual, cash and equivalents, and unutilised bank limits should suffice yearly debt repayment obligation of up to Rs 40 crore, capex requirements and incremental working capital requirement in the near term. |
Outlook Stable TIIL will benefit from sustained revenue growth and operating efficiency in the drum closure and scaffolding divisions. The financial risk profile is expected to remain strong, driven by steady revenue growth, healthy debt protection metrics and cash accrual over the medium term. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Company TIIL was established as a partnership firm in 1972, reconstituted as an unlimited company in 1991, and subsequently converted into a limited company in 1992. It has three major manufacturing divisions — drum closures, scaffoldings, garments and cotton yarn. TIIL is the leading drum closure manufacturer in the international market with a sizeable market share and annual capacity of 145 million pieces of drum closures including India and China. It has capacity of over 50,000 tonne of scaffoldings and around 62,000 spindles in its yarn division in India. The company has several marketing subsidiaries in the US and Europe. |
Key Financial Indicators
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: Annexure: List of instruments and names of regulators of the instruments As required by SEBI CRA Circular dated Feb 10, 2026, a list of activities or instruments falling under the purview of various FSRs, along with the names of respective FSRs, is being disclosed below:
* Includes securitisation transactions involving assignee payout, acquirer's payout. ~ The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In PRs subsequent to issuance(s), Crisil Ratings Limited shall separately capture the rated quantum details along with names of respective regulators. ^ Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions. # There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs. @ These ratings were assigned during regulatory regime prior to introduction of SEBI CRA Circular dated Feb 10, 2026 and the investor side regulators have accordingly been included.
Note: Kindly note that for activities or instruments falling under the purview of FSRs other than SEBI, the grievance/dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
Annexure - Details of Instrument(s)
& - Fungible with Fund base and Non-Fund base upto Rs. 80 Cr
^ - Fund base upto Rs. 50 Cr. and Non-Fund base upto Rs. 50 Cr.
% - Fungible with Fund base and non-fund base upto Rs. 200 Cr, Overdraft Rs. 30 Cr.
$ - Fungible with Fund base and Non-Fund base upto Rs 100 Cr
# - Fungible with Fund base and Non-Fund base upto Rs 125 Cr
@ - Fungible with Fund base and Non-Fund base upto Rs.116 Cr.
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Annexure – List of entities consolidated
& - Held by Technosoft Engineering Projects Limited @ Held by Technocraft International Limited ^ Held by Techhnosoft Engineering Inc. $ Held by AAIT/ Technocraft Scaffold Distribution LLC |
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||||||||||||||
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Criteria Details
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