Triveni Engineering Q4 Review: Systematix Maintains 'Buy' On Strong All-Round Results, Hikes Target Price

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Systematix Report

Triveni Engineering and Industries Ltd. reported consolidated revenue of Rs 19.2 billion, up 24% YoY (10% above our estimate), on the back of strong all-round performance across segments. Despite 157 bps YoY contraction in gross margin to 48% (estimate of 47%), Ebitda rose 25% YoY to Rs 3.1 billion (34% above estimate), with Ebitda margin expanding 14 bps YoY to 16% (estimate of 13.2%).

Strong performance in the sugar and gears divisions boosted profitability, as Ebit in sugar/gears rose by 41%/39% YoY, cushioning the sharp 44%/16% YoY contraction in distillery/water Ebit, respectively.

Management’s optimism for FY26 stems from potential improvements in sugar cane production and recovery, sustained growth in the engineering business and ongoing efforts to improve margins in the distillery segment. We expect profitability to improve in FY26 on the back of-

1. higher sugar prices (~Rs 41/kg vs. ~Rs 39/kg in FY25) on projected lower sugar production during SS 2025 and potential allocation of sugar exports,

2. higher ethanol volumes and expected upward revision in realization by the government during SS 2025-26, along with softening maize prices and improved availability of FCI rice at a lower price,

3. record order intake in the gears division (Rs 4.7 billion) and closing order book of Rs 3.9 billion providing strong revenue visibility.

We have thus raised our FY26E/FY27E revenue by 4.6%/7%, Ebitda by 19%/16%, EPS by 14.2%/14.7%, respectively, to capture the higher profitability across divisions. Our revised SoTPbased target price of Rs 545 (Rs 472 earlier) is based on 17x FY27E P/E and 12.6x FY27E EV/Ebitda.

We retain Buy on Triveni Engineering and assign EV/Ebit of 14x to distillery, 8x to sugar and 20x to the engineering and water businesses.

Key risks: Lower-thanexpected recovery rate and no revision in ethanol prices.

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