Triveni Engineering Q3 Results Review - Systematix Retains 'Buy' On The Stock — Here's Why

Weak performance in all business verticals impacted Triveni Engineering’s profitability, as Ebit for sugar/distillery/gears fell by 65%/92%/11% YoY..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.Triveni Engineering and Industries Ltd.’s consolidated revenue grew 3% YoY to Rs 16 billion (in line with estimate) on the back of 9%/3% YoY growth in distillery/gear revenues at Rs 3.3 billion/Rs 0.7 billion, respectively. However, 9%/8% YoY degrowth in sugar/water revenues at Rs 9.3 billion/Rs 0.5 billion respectively, partly offset the positive performance. Gross margin contracted 227 bps YoY to 42.9% (estimate of 43%), Ebitda fell 60% YoY to Rs 771 million (48% below estimate) and Ebitda margin contracted 760 bps YoY to 4.8% (estimate of 9.5%). Weak performance in all business verticals impacted Triveni Engineering’s profitability, as Ebit for sugar/distillery/gears fell by 65%/92%/11% YoY. .However, we expect profitability to improve in the coming quarters on the back ofRs 2-2.5/kg increase in sugar price, on forecast lower sugar production in sugar season 2025 and allocation of sugar export,higher price of C-Heavy molasses-based ethanol, availability of FCI rice at lower price and expected softening of maize prices in anticipation of a bumper crop, and positive developments in gears, water, and waste-water treatment businesses in 9M FY25, supported by robust domestic and international order books. .We have raised FY25 revenue by 16% to factor in higher export sugar volumes but cut FY25E/FY26E Ebitda by 7.7%/22.6% to factor in higher raw material sugar and ethanol costs; EPS too is cut by 7.9%/25.5%. We roll forward valuations to newly introduced FY27E. Our SoTP-based target price of Rs 472 (Rs 482 earlier) implies 17 times FY27E P/E and 12x FY27E EV/Ebitda. We retain Buy on Triveni Engineering and assign EV/Ebit of 14x to distillery, 7x to sugar and 20x to engineering and water businesses. Key risks: Disappointing recovery rate and higher maize/rice procurement prices..Click on the attachment to read the full report:.Swiggy Q3 Results Review: Motilal Oswal Reiterates 'Neutral' Stance On The Stock — Here's Why.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit. .Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Triveni Engineering Q3 Results Review - Systematix Retains 'Buy' On The Stock — Here's Why

The brokerage retain Buy on Triveni Engineering and assign EV/Ebit of 14x to distillery, 7x to sugar and 20x to engineering and water businesses.

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