Trf Limited

TRF belongs to the TATA group, with TSL (rated CARE AA+; Stable) holding 34.12% stake as on March 31, 2024. TRF Limited is engaged in material handling and plays a pivotal role in fulfilling orders from TSL. Given that the location of TRF plant is close to the TSL plant and the raw material (steel) is also procured from TSL, TRF has a strong competitive advantage in better serving TSL compared to other external vendors (if). TSL has demonstrated support to TRF by subscribing to 12.5% NCRPS of ₹2

TRF was incorporated in 1962 as Tata-Robins-Fraser Limited Over the past six decades, the company has expanded its material handling equipment portfolio with the introduction of new variants. The company also expanded itspresence in the international market. The company developed an established name in the material handling equipment and processing systems required in the infrastructure development industries such as power, steel, cement, ports, and mining industries. The company has undertaken

In FY23, the company repaid all its external borrowings, including a long-term debt of ₹57 crore, working capital borrowings of ₹107 crore and ICDs amounting to ₹100 crore. These repayments were done through the proceeds from NCRPS received from TSL, aggregating to ₹264 crore. This has resulted in improvement in the financial risk profile. The newly issued NCRPS (in FY23) of ₹239 crore has maturity period in FY2038. However, given the option of early redemption, NCRPS in its entirety has been

TRF’s total operating income (TOI) declined by 20.5% y-o-y to ₹140.69 crore in FY24, led by decline in revenue from sectional and mine conveyors, vibrating screens and components and miscellaneous products. Revenue from services, which includes design, engineering supervision, manpower deployment, and leasing of facilities, encompasses rental income from an operating lease with TSL amounting to ₹28.89 crore. However, the company has effectively managed its fixed overheads by sharing certain

TRF’s business, being execution of engineering, procurement and construction (EPC) contracts and providing customized equipment is working capital intensive considering high collection period due to disbursement of payment by the client on achievement of certain milestone and blockage in the form of retention money, which gets released after the successful completion of performance guarantee test period. Operations are also characterised by high collection period owing to milestone payment

Steel is the major cost component, followed by forgings, tubes, bearings, electrical and bought out components and their prices are volatile. Orders in projects division are more vulnerable to raw material price volatility due to long gestation period of its nature. Though some orders have price escalation clause, the degree of passing input cost to customers is limited with presen ce of many other clauses. Orders in project division with short-term cycle and product division are executed mainly

TRF faces intense competition in the material handing industry as both domestic players ( including Elecon Engineering Co Ltd, L&T) and international players (including ThyssenKrupp) have increased presence in the past few years. As most TRF orders are tender driven, it restricts the company’s profitability with new and existing players bidding aggressively to gain market share. Therefore, TRF forecasts on providing its services only to TSL in the coming years. The company’s prospect is largely