Buy Triveni Turbine; target of Rs 85: Prabhudas Lilladher

Prabhudas Lilladher's research report on Triveni Turbine

Triveni Turbine Ltd (TRIV) reported decent performance on account of better product mix and cost rationalization measures. Margins came in strong at 26.7% driven by higher share of exports in sales mix, lower raw material cost and reduction in overhead cost. Order inflows declined by 16% YoY largely impacted on account of pandemic. However, exports market’s reported growth of 6% YoY in OI driven mainly from Europe, Middle East, South and Central America. Order backlog remained subdued at ~Rs6.7bn. Enquiry pipeline (~up 30% YoY in 1HFY21) continues to remain strong both in domestic and exports market. Within exports markets, demand is expected to be driven by renewable sector mainly from the Biomass and Waste-toEnergy projects. In the domestic product market good traction has been witnessed from Sugar cogeneration including distillery, Biomass IPP, food processing and waste heat recovery segments.

Outlook

Given strong 1HFY21 performance and expectation of cost control measures to sustain, we have revised our earnings upwards by 2.5%/2.4%/2.9% for FY21E/FY22E/FY23E. The stock is currently trading at 28.3x/18.5x FY21E/FY22E. We maintain BUY with a TP of Rs85 (earlier TP of Rs83).

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