Accumulate Triveni Turbine; target of Rs 450: Prabhudas Lilladher

Prabhudas Lilladher's research report on Triveni Turbine

Triveni Turbine (TRIV) reported revenue growth of 32.4% YoY, driven by strong aftermarket sales (up 71.4% YoY). EBITDA margin continued to remain flattish despite gross margin improvement, due to high sub-contracting expenses in SADC and increase in international travel expenses. Domestic enquiry pipeline is robust owing to pick up in Cement sector and resilience in Steel and Distilleries. International demand is coming from the Americas, Europe, and South East Asia, in areas such as independent power plants, process co-generation, and biomass. There is good traction in the aftermarket segment, particularly in upgradation & automation, with the company expanding its international service offerings to drive growth. TRIV will continue to add skilled manpower to improve its R&D capabilities for quality enhancement and new product development, with focus on capturing higher value orders.

Outlook

We believe TRIV’s prospects continue to remain strong due to 1) healthy enquiry pipeline (up 33% YoY) across markets, 2) growing share of higher margin exports and aftermarket sales, 3) strong traction in both industrial and API drive turbines, and 4) robust order book with strong inflows across its businesses. Due to the recent run-up in the stock price, we maintain an ‘Accumulate’ rating on the stock and roll forward to Sep-25E with a revised TP of Rs450 (Rs419 earlier), valuing it at 35x Sep-25E (37x FY25E earlier).

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