Prabhudas Lilladher's research report on Triveni Turbine
Triveni Turbine (TRIV) reported a healthy quarterly performance, with revenue growth of ~33% YoY and order inflow growing ~71% YoY, driven by strong growth in domestic market. EBITDA margins in FY22 came in at 19.1% (vs 21% in FY21), mainly due to lower contribution from exports segment and higher commodity price. However, with exports revenue picking up (led by strong exports OB; 45% of total OB vs 30% in FY21), margins are expected to expand going forward. Enquiry generation grew 36% in FY22, (domestic up 57%, exports up 25%) thereby providing strong order inflow visibility for FY23 and revenue going forward. Domestic enquiry is driven by sectors such as process co-generation, food Processing, Distillery, Pulp & Paper, Chemicals etc., while exports is driven by process industries and O&G. During the quarter company acquired 70% stake in TSE Engineering Ltd, which is likely to strengthen its aftermarket business in South African Development Community (SADC) region.
Outlook
Given robust enquiry pipeline, robust OB, improving operational efficiency, incremental opportunity in 30-100MW market and improving margins due to increasing export share, we expect revenue/PAT CAGR of 27%/34% for FY22- FY24E. The stock is trading at PE of 33.6x/25.4x FY23/24E. We maintain ‘Buy’ rating on stock with revised TP of Rs240 (Rs 244 earlier).
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