YES Securities' research report on Triveni Turbine
Triveni Turbine (TRIV) reported healthy performance on account of better sales mix and execution ramp up. EBITDA Margins contracted ~64bps YoY owing to commodity pressures. Order inflows came in at Rs3.6bn (up 31% YoY) led by strong growth in domestic markets at Rs2.5bn while export OI grew by 44%. Order book remains strong at ~Rs10.7bn (1.2x TTM revenue), providing revenue visibility for FY23. Enquiry pipeline remains strong in both domestic and exports from sectors such as food processing, pharma, cement, sugar, oil & gas, steel, etc. Going forward, management expects margins to be in the region of ~20% and guided for 30‐35% FY23 revenue growth. We believe, 1) company’s strong margin profile, 2) lean working capital, 3) healthy cash flows, balance sheet and 4) long term growth prospects (~diversification in new types of turbines) will support its valuations and future projections.
Given strong enquiry pipeline, management`s focus on cost rationalization and improving operational efficiency, we expect the company to generate revenue/PAT CAGR of 25%/29% from FY21 to FY24E. The stock is currently trading at 35.3x/28.3x FY23E/24E EPS. We maintain our BUY rating on the stock with a TP of Rs273 valuing it at 40x FY24E EPS of Rs6.8.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.