TARACHAND - Tara Chand Infra

📊 NSE: TARACHAND 🏢 Diversified - Medium / Small 📅 Last Updated: 12/14/2025 14:07

💰 Financial Performance

Revenue Growth by Segment

Segment A (Equipment Rentals & Infrastructure) grew 33% YoY to INR 69.51 Cr in H1 FY26, contributing 55% of total revenue. Segment B (Warehousing, Handling & Transportation) contributed 45% of H1 FY26 revenue. Segment C (Steel Processing & Distribution) saw a sharp decline to 0.4% of revenue as the company exits low-margin EPC projects.

Geographic Revenue Split

Not disclosed in percentage terms; however, the company operates across the length and breadth of India with significant stockyard operations for SAIL and RINL.

Profitability Margins

Net Profit Margin improved from 9.38% in FY24 to 10.03% in FY25. For H1 FY26, the PAT margin remained stable at 11% despite a 44% increase in depreciation costs, driven by a shift toward higher-margin specialized services.

EBITDA Margin

EBITDA margin rose by more than 300 basis points to 39.20% in H1 FY26 compared to 33% in FY25. This improvement is attributed to the strategic reduction of low-margin steel processing and the deployment of high-yield next-generation equipment.

Capital Expenditure

The company executed its highest-ever annual CAPEX of INR 145 Cr in FY25. For FY26, the planned CAPEX is INR 100 Cr, of which INR 83.30 Cr (83.3%) was already deployed in H1 FY26 primarily for large tonnage cranes and piling rigs.

Credit Rating & Borrowing

CRISIL reaffirmed the rating at 'Crisil BBB-' and revised the outlook to 'Positive' in fiscal 2025. Interest coverage ratio improved 38.37% YoY to 5.59 in FY25, while adjusted debt protection metrics stood at 11 times according to credit reports.

⚙️ Operational Drivers

Raw Materials

Steel coils and products (for processing segment), fuel, and equipment spare parts. Purchase of stock-in-trade represented INR 12.31 Cr (approx. 5% of revenue) in FY25.

Key Suppliers

Steel Authority of India Ltd (SAIL) is a primary partner for warehousing and handling; other equipment vendors for fleet expansion are not specifically named.

Capacity Expansion

Fleet expansion is focused on large tonnage cranes, higher capacity piling rigs, and aerial platforms to serve the Renewable Energy and Cement sectors. INR 145 Cr was invested in new assets in FY25.

Raw Material Costs

Purchase of stock-in-trade was INR 12.31 Cr in FY25, up 2.6% from INR 11.99 Cr in FY24. The company is reducing its exposure to material-heavy steel processing to focus on service-based rentals.

Manufacturing Efficiency

The company maintains 'healthy utilization levels' and focuses on 'quicker deployment of newly added assets' to maximize monthly yields.

Logistics & Distribution

Segment B (Warehousing and Transportation) accounts for 45% of total revenue, focusing on handling and stockyard management for major steel PSUs.

📈 Strategic Growth

Expected Growth Rate

20-25%

Growth Strategy

Growth will be achieved through a conscious shift away from low-margin EPC/Steel segments toward high-margin equipment rentals and specialized services. The company is investing INR 100 Cr in FY26 to expand its fleet of large tonnage cranes and piling rigs to capture demand in the Renewable Energy and Cement sectors.

Products & Services

Heavy equipment rentals (cranes, piling rigs, aerial platforms), warehousing services, handling and transportation, and specialized contractual services for infrastructure projects.

Brand Portfolio

Tarachand Infralogistic Solutions Ltd.

New Products/Services

Next-generation high-capacity equipment and specialized services for industrial sectors, expected to contribute to the 300 bps EBITDA margin improvement.

Market Expansion

Targeting Renewable Energy, Cement, and allied industrial sectors. Secured domestic orders worth INR 58.76 Cr for specialized services commencing Q3 FY26.

Strategic Alliances

Long-term partnership with SAIL (4.5-year Dankuni contract) and ongoing stockyard management for RINL.

🌍 External Factors

Industry Trends

The industry is shifting toward specialized, high-capacity equipment rentals as infrastructure projects become more complex. The company is positioning itself by investing in next-gen fleet assets to meet 20-25% annual growth targets.

Competitive Landscape

Faces 'intense competition' in the general logistics segment, which it mitigates by moving into specialized equipment rentals and long-term warehousing contracts.

Competitive Moat

Durable advantages include a 40-year track record, established relationships with major PSUs like SAIL, and a specialized high-tonnage fleet that acts as a barrier to entry for smaller competitors.

Macro Economic Sensitivity

Highly sensitive to infrastructure spending and GDP growth; government capital infusions into PSUs like RINL directly improve the company's stockyard opportunities.

Consumer Behavior

Clients are increasingly preferring specialized contractual services over simple equipment hiring to ensure project efficiency.

Geopolitical Risks

Economic conditions affecting demand and supply in domestic and overseas markets are noted as risk factors in the cautionary statement.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to changes in government regulations, tax laws, and pollution norms affecting heavy machinery and transportation.

Taxation Policy Impact

Current tax expense for FY25 was INR 5.52 Cr on a PBT of INR 33.25 Cr, representing an effective current tax rate of approximately 16.6%.

Legal Contingencies

Management and auditors report no instances of significant fraud or material legal violations during the year; specific case values for pending litigation are not disclosed.

⚠️ Risk Analysis

Key Uncertainties

Working capital intensity and the high capital requirement for fleet expansion (INR 100 Cr+ annually) pose risks to the capital structure if asset utilization drops.