The agency has reaffirmed its 'CRISIL A1+’ rating on the short-term bank facility of the company.

CRISIL stated that the rating upgrade reflects the expectation of sustained improvement in the 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 healthy growth across business segments leading to better operating efficiency.

While the company has significant exposure to the global market, which has been facing a slowdown since last year, strong market position and technical expertise in the drum closure and scaffolding segment have helped sustain its operating performance.

Growth outlook remains comfortable as economic operations revive globally. Furthermore, the financial risk profile remains healthy benefited by healthy cash accrual, negligible cash commitments and prudent cash flow management.

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 its improved operating performance and healthy financial risk position.

These strengths are partially offset by weaker operating performance of the yarn and fabric division and the company’s susceptibility to volatility in raw material prices and fluctuations in foreign exchange (forex) rates.

Technocraft Industries India has three major manufacturing divisions: drum closures, scaffoldings, and garments and cotton yarn. It is the leading drum closure manufacturer in the international market, with a sizeable market share and annual capacity of 55 million sets of drum closures in India and 20 million sets in China. It has capacity of 40,000 tonne of scaffoldings and around 60,382 spindles in its yarn division in India.

In the first half of fiscal 2024, TIIL generated income of Rs 1,107 crore (Rs 1,031 crore in the corresponding period of fiscal 2023) and profit after tax (PAT) of Rs 161 crore (Rs 141 crore).