Technocraft Industries Faces Tariff Headwinds in US Market, Domestic Formwork Business Remains Strong
Technocraft Industries reported stable Q1 results despite US tariff increases affecting its scaffolding business, with US sales declining 35% quarter-on-quarter. The scaffolding segment faces a 23% tariff, potentially rising to 34%. The formwork business (Mach One) showed robust growth, with expected revenue of INR 900 crores this fiscal year. The company is diversifying geographically to mitigate US market risks, exploring opportunities in Saudi Arabia, South America, and Japan. The textile division faces potential 50% tariffs on US exports. Management remains cautious about providing guidance for the scaffolding business due to evolving tariff situations.

*this image is generated using AI for illustrative purposes only.
Technocraft Industries reported stable quarterly results for Q1, despite challenging market conditions driven by US tariff increases. The company's scaffolding business, which accounts for a significant portion of its revenue, faced headwinds with US sales declining approximately 35% quarter-on-quarter due to tariff-related demand disruptions.
Tariff Impact on Key Segments
The scaffolding segment, which contributes about 56% of the company's total segment revenue, is currently subject to a 23% tariff in the US. This could potentially rise to 34% if additional Russian-linked tariffs are implemented. The drum closure division faces even steeper tariffs, with current rates at 27.60% that could escalate to 52.60%.
Navneet Saraf, Director and CEO of Technocraft Industries, stated, "We are able to pass on the tariffs in the scaffolding segment. However, for drum closures, we have decided not to pass on any additional tariffs beyond the current 27.60% to maintain our competitive position against EU imports."
Formwork Business Shows Robust Growth
Despite challenges in the scaffolding segment, the company's formwork business (Mach One) showed robust performance. The new Aurangabad plant is operating at 75% capacity and is expected to reach 90-95% utilization in the coming months.
"We are confident of achieving INR 900.00 crores revenue from the Mach One business this fiscal year, up from INR 520.00 crores in the previous year," Saraf added. The company reported a strong order book of INR 350.00 crores for the formwork business, representing approximately 4 months of sales.
Diversification Strategy
To mitigate risks associated with the US market, Technocraft Industries is focusing on geographical diversification. The company is exploring opportunities in Saudi Arabia and South America for its scaffolding and formwork products. Additionally, it has recently started operations in Japan for its engineering services division.
Outlook
While the company maintains a positive outlook for its domestic formwork business, uncertainties remain regarding the scaffolding exports due to the evolving tariff situation in the US. The management indicated that the impact of these tariffs would be more evident in the coming quarters.
"It's difficult to provide guidance for the scaffolding part of the business at this point," Saraf noted. "The severity of the tariff impact will only be visible in the subsequent quarters."
The company's textile division is also facing significant challenges, with potential 50% tariffs on US exports threatening to halt sales to that market. Technocraft Industries is exploring manufacturing options outside India to mitigate this impact.
Despite these challenges, Technocraft Industries remains focused on leveraging its diversified product portfolio and geographical presence to navigate the current market turbulence.
Historical Stock Returns for Technocraft Industries
1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
---|---|---|---|---|---|
+2.53% | -6.55% | -8.59% | -15.52% | -31.81% | +532.56% |