Sharekhan's research report on Triveni Engineering and Industries
Triveni Engineering & Industries’s (TEIL’s) Q4FY2021 performance was affected by lower sugar dispatches that dragged down revenues by 21%. However, higher gross margins helped OPM rise 135 bps to 13.8%. FY21 revenues and PBT grew by 6% and 8%, respectively, while OPM stood at 11.9%. Reducing debt by Rs. 562 crore aided in interest cost reduction of 35% during the year. Ethanol capacity will be expanded to 660 klpd by FY23. Better sugar realisations, higher revenues from distillery business and a recovery in the engineering & water business would help PAT to grow by 30% over FY21-23.
Outlook
Structural change in sugar industry, fall in consolidated debt and double-digit earnings growth visibility are key re-rating triggers. We maintain a Buy with a revised PT of Rs. 240.
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