Trident - Healthy free cash flows shift focus to balance sheet deleveraging: CRISIL

Trident | Company issued Commercial Paper for Rs 50 crore. (Image: tridentindia.com)

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26 Aug, 2025 12:21

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CRISIL's research report on Trident

 
Over the years, Trident Ltd has strengthened its position and expanded across the value chain to metamorphose from a yarn manufacturer to an integrated home textile major. Healthy free cash flows have shifted its focus to deleveraging the balance sheet. It also plans to raise funds from the capital markets to prepay debt. We expect moderate to high growth in the medium term. While the home textile segment (comprising bath linen and bed linen) is expected to grow at a robust pace on the back of improving domestic demand, entry into new overseas markets and implementation of GST; the yarn segment is exposed to rising captive consumption. Spare capacity in the terry towel and bed linen segments – which have a large addressable market and provide cross-selling opportunities – is a good augury for future growth and margin expansion. Consistent increase in revenue, and operating and financial leverage benefits are expected to result in robust earnings growth over the next two-three years and significant improvement in return ratios. We, thus, raise our fundamental grade to 4/5.

We have broadly maintained our earnings estimates. However, we have lowered the cost of equity to 15.5% as a result of revision in the fundamental grade. Consequently, we have increased our fair value to Rs 128. The fair value implies P/E multiples of 15.4x and 12.9x on FY18E and FY19E EPS, respectively. At the current price of Rs 97, our valuation grade is 5/5.

Disclaimer: This report (Report) has been commissioned by the Company/Investor/Exchange and prepared by CRISIL. The report is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. Opinions expressed herein are CRISIL's opinions as on the date of this Report.  The Data / Report are subject to change without any prior notice. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information of the authorized recipient only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied in whole or in part especially outside India, for any purpose.

CRISIL Limited. All Rights Reserved. Published under permission from CRISIL"

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