Triveni Engineering and Industries Q3 Results Review - Sugar And Gear Segments Shine; Maintain Buy: Systematix

Systematix Report

Triveni Engineering and Industries Ltd.'s revenues slipped 6% YoY to Rs 15.5 billion, 11% more than our estimate. Revenue fell due to

1. lower sugar sales,

2. operational delays in certain projects in the water business, which caused 49% YoY decrease in segment turnover.

However, healthy 17% YoY revenue growth in the Power Transmission Business and 8% YoY growth in the distillery (net of excise) segment on higher sales volumes offset the decline to an extent. Ebitda was flat YoY at Rs 1.9 billion, but 17% above our estimate of Rs 1.7 billion.

Ebitda margin expanded 76 basis points YoY to 12.4% on improved profitability in the sugar and gear segments. Other income fell by 41% YoY to Rs 219 million, finance cost declined 20% YoY to Rs 65 millon and depreciation increased by 10% YoY. Consequently, profit before tax fell 8% YoY to Rs 1.8 billion. Profit after tax dropped 7% YoY to Rs 1.4 billion (30% above our estimate).

Net debt (consolidated) as on December 31 2023 increased to Rs 2.3bn versus Rs 1 billion as on September 30 2023. TRE has acquired 25.43% stake in Sir Shadi Lal Enterprises and has given an open offer to acquire additional 26% shares. SSLE has an installed cane crushing capacity of 7,500 TCD and crushed 0.998 million tonne of cane during FY23 at a recovery rate of 10.15%. It also has a 100 kilo litres per day distillery.

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