Accumulate Triveni Turbine; target of Rs 430: Geojit

Geojit recommended accumulate rating on Triveni Turbine with a target price of Rs 430 in its research report dated August 16, 2023.

Broker Research

August 18, 2023 / 14:33 IST

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Geojit's research report on Triveni Turbine

Triveni Turbine Ltd (TTL) is the domestic market leader in steam turbines up to 30 MW. The company designs and manufactures steam turbines up to 100 MW, and delivers robust, reliable, and efficient endto-end solutions. In Q1FY24, TTL reported a better than expected top-line growth of 45% YoY , driven by strong aftermarket revenue growth of 91% YoY, while product sales grew by 29% YoY. Gross margin improved by 841bps YoY to 51.5%, due to favourable product mix. While EBITDA margin was flat at 18.8%, due to higher other expenses and staff costs. Order book for Q1FY24 increased by 31% YoY with strong demand from Sugar, Distillery, Steel, Independent Power Producers, Oil & Gas. Higher mix of export orders will bode well for TTL’s ability to increase international market share and contribute to a higher margin profile. Rising global energy demand particularly in the industrial segment are expected to support demand for heating and cooling solutions in the medium term.

Outlook

However, valuation remains expensive due to the recent uptick in price. We assign Accumulate rating and value the stock at a P/E of 40x on FY25E EPS with a TP of Rs. 430.

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