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

Sharekhan is bullish on Triveni Engineering and Industries has recommended buy rating on the stock with a target price of Rs 340 in its research report dated November 07, 2022.

Broker Research

November 13, 2022 / 13:29 IST

Sharekhan's research report onTriveni Engineering and Industries

Triveni Engineering & Industries Limited (TEIL) delivered mixed operating performance in Q2 with revenue growing in double digits by 27% y-o-y to Rs. 1,471.6 crore, while EBITDA margin declined by 620 bps y-o-y to 3.1%, which resulted in a 55.8% y-o-y decline in adjusted PAT to Rs. 24.1 crore. Outlook for the sugar season 2022-2023 is strong with the company expecting sugar production to be higher compared to UP’s expected production increase of 4%; recovery rate to be higher due to modernisation of three sugar units; realisation to be higher due to increased sales of refined sugar and pharma grade sugar. Ethanol capacity to expand to 1,110 KLPD by the end of FY2024 from 660 KLPD currently. Ethanol sales for FY2023/FY2024/FY2025 is expected to be at 16.0 crore litre, 20.5 crore litre, and 31.8 crore litre, respectively.

Outlook

TEIL’s stock price is currently trading at 21.3x and 14.8x its FY2023E and FY2024E earnings. We maintain our Buy recommendation on the stock with a revised PT of Rs. 340.

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