| Technocraft Industries (India) Three too many
Businesses are unexciting Promoted by the Saraf family, Technocraft is a diversified company with three divisions: drum closures, pipe, and yarn. Technocraft is among the largest manufacturers and exporters of drum closures with an annual production of 25 million sets exported to 60 countries in the world. The pipe division produces 3,500 tonnes per month of hot dip galvanised ERW steel tubes used extensively in irrigation, construction and transportation of gas, water, and chemicals. To enhance value addition, the company took a strategic step towards forward integration into scaffoldings. It developed Technocraft Scaffolding System to meet international standards with unique concepts like T Scaffoldings. The drum closures division accounted for 27% of FY 2006 sales and 40% of FY 2006 profit before interest and tax (PBIT). The pipe division contributed 42% of FY 2006 sales and 26% of FY 2006 PBIT. The yarn division garnered 26% of FY 2006 sales and 28% of FY 2006 PBIT. Exports accounted for 89% of total sales. Technocraft plans to upgrade the drum-closure plant and set up a new plant with a capacity of 9 million sets per annum. The company is set to increase the production of scaffolding systems in the pipe division and add a range of new products for the infrastructure and construction industries. About 25,200 spindles are to be added in the yarn division to increases its capacity to 61,104 spindles, and so also a 15-MW captive plant. Technocraft is entering the retail garment segment by opening 100 stores by 2007. Between FY 2003 to FY 2006, consolidated sales registered a CAGR of 22.5%. But CAGR of net profit was only 3%. The consolidated FY 2006 EPS on the post-equity works out to Rs 9.7. At the price band of Rs 95- Rs 105, PE is 9.8-10.8. The first-half annualised consolidated EPS stands at Rs 13.5, and PE 7 - 7.8. Technocraft’s businesses attract poor PE. Being a diversified company, the applicable PE will be even lower. | Technocraft Industries: Issue Highlights | | Sector | Diversified- Medium | | Sector TTM P/E | 13.3 | | No. of shares fresh issue (in lakh) | 83.2 | | No. of shares reserved for employees (in lakh) | 4.2 | | Price band (Rs) | 95-105 | | Post issue equity (Rs crore) | 31.53 | | Post-issue promoter stake (%) | 73.61 | | Issue open / close | 18-01-2007/23-01-2007 | | Listing | BSE/NSE | | Rating: | 40/100 | | Technocraft Industries: Consolidated Financials | | | 0203(12) | 0303(12) | 0403(12) | 0503(12) | 0603(12) | 0609(6) | | Sales | 180.59 | 197.49 | 296.75 | 378.94 | 362.90 | 213.21 | | OPM % | 8.9 | 13.5 | 2.3 | 6.0 | 10.7 | 14.5 | | Operating profit | 16.08 | 26.64 | 6.93 | 22.83 | 38.68 | 30.85 | | Other income | 16.77 | 21.80 | 38.65 | 36.87 | 18.17 | 9.85 | | PBIDT | 32.84 | 48.44 | 45.59 | 59.70 | 56.85 | 40.70 | | Interest | 2.14 | 2.28 | 2.83 | 4.30 | 5.77 | 0.76 | | PBDT | 30.70 | 46.16 | 42.76 | 55.40 | 51.09 | 39.94 | | Depreciation | 7.52 | 7.08 | 9.12 | 12.49 | 12.24 | 6.02 | | PBT | 23.18 | 39.07 | 33.64 | 42.91 | 38.85 | 33.93 | | Tax | 4.62 | 11.11 | 5.93 | 11.97 | 8.30 | 12.66 | | PAT before EO | 18.56 | 27.96 | 27.71 | 30.94 | 30.55 | 21.26 | | EO | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | | PAT after EO | 18.56 | 27.96 | 27.71 | 30.94 | 30.55 | 21.26 | | Post issue shares | 3.15 | 3.15 | 3.15 | 3.15 | 3.15 | 3.15 | | EPS (Rs)* | 5.9 | 8.9 | 8.8 | 9.8 | 9.7 | 13.5 | *On post-IPO equity of Rs 31.53 crore
Face Value: Rs 10.
Figures in Rs crore
Source: Capitaline Corporate Database | |