Triveni Engineering shares drop over 5% following plunge in Q1 net profit

At 2.20 PM, the stock traded 3.6 percent lower at Rs 401. The stock has gained over 18 percent in the past six months, outperforming the Nifty 50 which gained over 13 percent during the same period.

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Shares of Triveni Engineering & Industries Ltd fell up to 5.5 percent after the company reported a 54 percent drop in its consolidated net profit for the June quarter.

At 2.20 PM, the stock traded 3.6 percent lower at Rs 401. The stock has gained over 18 percent in the past six months, outperforming the Nifty 50 which gained over 13 percent during the same period.

Triveni Engineering reported a net profit of Rs 31 crore for the quarter ending in June, down from Rs 68 crore the previous year. The company attributed the lower profitability to decreased segment performance across most of its businesses. The sugar segment, despite a higher share of sales, suffered from reduced production and increased off-season expenses due to the early closure of the season.

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Meanwhile, the alcohol segment faced challenges from government restrictions on grain feedstocks, which led to the substitution of surplus rice with maize. This substitution raised molasses transfer prices and resulted in a 4.3 percent decline in sales volume, exacerbated by a drop in higher-margin ethanol production from sugarcane feedstocks.

The water business was a notable exception, showing improved profitability due to effective cost savings.

The EBITDA fell over by 30 percent YoY to Rs 97 crore and EBITDA margin reduced to 7.5 percent from 11.4 percent.

The revenue from operations (net of excise duty), however, increased by 8.6 percent YoY to Rs 1,301 crore "mainly due to higher sugar sales volumes as well as improved realisations."

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