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Last Updated : Oct 07, 2016 10:56 AM IST | Source: CNBC-TV18

Textile to turn around; expect growth in scaffolding:Technocraft

Technocraft Industries has been buzzing off late with a 75 per cent gain in the last six months. In an interview to CNBC-TV18, Sharad Saraf, MD of Technocraft Industries said that the stock was undervalued for a long time. Hence, it's coming back to its normal levels now.

Technocraft Industries has been buzzing of late with a 75 percent gain in the last six months. 

In an interview to CNBC-TV18, Sharad Saraf, MD of Technocraft Industries said that the stock was undervalued for a long time. Hence, it's coming back to its normal levels now.

However, we do not keep a track of pricing etc. We just continue to do our business, he said.  


Below is the verbatim transcript of Sharad Saraf's interview to Latha Venkatesh & Anuj Singhal.

Anuj: Your stock has been buzzing. Has there been any development which we are unaware of because it is up about 75 percent in the last six months?

A: Development is an ongoing process and it is always continuing. The prices that you have seen now, I personally feel that the investors felt that it was a bottled up stock, it was undervalued for such a long. So maybe it is coming back to its normal level but we are not keeping track of pricing etc. We are continuing with our business.

Latha: How will the second half look vis-à-vis the first half? How will you end the year in terms of revenues and EBITDA?

A: Technocraft is not just a textile company. Textile is only about 1/3rd of our business and it contributes less than 10 percent of the bottomline. 

We are primarily an engineering company. So on engineering side we have two product lines; we do scaffolding systems and drum closure, both are performing well. However, in scaffolding we have added new items. We are now doing transmission line towers, we are doing some defence projects and producing some defence products, we also do foam work, so a lot of additions have been done there. The performance of scaffolding division has been extremely good. Basically we are 2/3rd engineering and 1/3rd of textile.

Latha: Drum closure has not moved much though as you say it is a very big division. In the second half how much might scaffolding grow and how much might textiles grow. Overall how much will revenues and EBITDA grow?

A: We feel textile will turnaround in the second half. We are well covered with cotton at a reasonably affordable price. Of course the challenges continue and in textile our fabric division where we made capex of about 17-18 crore last year, is now showing results. At the same time the captive power plant is also showing good results. Therefore, in textile we see a turnaround. In yarn, of course the challenging time may continue but thanks to our cotton purchase.

Latha: Can you give a number as to what you might do in terms of growth this year and next?

A: In textile we may do about 5 percent growth. I am talking of bottomline. I am not talking about topline growth; topline growth will have no significant value. Topline growth maybe about 10 percent but some of it is pass-through, it goes to increase in the cost.

In scaffolding we could see a growth of 15-20 percent in the second half and we are trying hard. We have constraint of capacity at the moment. We are fully booked but we are trying to see what best we can do.

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First Published on Oct 7, 2016 10:56 am
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