Buy Triveni Engineering and Industries; target of Rs 340: Sharekhan

Sharekhan's research report on Triveni Engineering and Industries

Triveni Engineering & Industries’ (TEIL’s) Q4 performance was ahead of expectation led by strong double-digit growth across businesses. Revenues grew by 52.5% y-o-y to Rs. 1,818.3 crore, EBIDTA margins stood flat at 14.5%; PAT grew by 75% y-o-y to Rs. 190.3 crore. Cane plantation to grow by 5.5% in the next season. This along with capacity expansion to 65,000 TCD will aid consistent growth in sugar business with favourable demand-supply scenario in domestic and international market. Ethanol business revenues to grow at CAGR of 30%+ over FY23-25E due to expansion in capacity to 1,110 KLPD (large benefit would flow in FY25). Overall EBIDTA margins will rise as the mix improves. Working capital requirement will also reduce in the coming year.

Outlook

TEIL’s stock price is currently trading at 12.9x and 10.0x its FY2024E and FY2025E earnings, respectively. We maintain a Buy with an unchanged PT of Rs. 340.

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