Buy Triveni Turbine; target of Rs 455: Sharekhan

Sharekhan's research report on Triveni Turbine

As per our interaction with Triveni Turbine Limited (TTL), the key levers for growth are the scaling up of exports and aftermarket business. In the aftermarket, the company is going beyond industrial steam turbines to other rotating equipments and value-added components. TTL has a robust enquiry pipeline in both domestic and international markets. In the domestic market, distillery, sugar, food, cement, and steel are leading the order intake, while international markets are driven by climate change requirements. The company has sufficient capacity to cater to 300 turbines and may not need a huge capex for the next few years. Despite the likely increase in its employee cost, margin tailwinds exist in terms of stabilisation of raw-material cost, scaling up of the aftermarket business, and overall operating leverage.

Outlook

Apart from strong business prospects, TTL has a lean working capital cycle and healthy cash of Rs. 747 crore. We build in a revenue/PAT CAGR of ~31%/32% (FY2023-FY2025E) and retain our Buy rating on TTL with an unchanged PT of Rs. 455.

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