Buy Triveni Turbine; target of Rs 328: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Triveni Turbine

Triveni Turbine (TRIV) reported a strong quarterly performance with revenue and PAT growth of 41.9% and 66% YoY. During the quarter EBITDA margin appeared to be lower due to costs booked in one of large aftermarket order in South African Development Community (SADC), where revenue is likely to be recognized from Q3FY23. Going forward, with improving product mix (higher contribution from exports and aftermarket), stable commodity prices and renegotiation of commodity contracts at lower prices, we expect margin expansion in short to medium term. Ordering activities are likely to continue its momentum for next couple of quarters driven by healthy enquiry pipeline which grew 27% YoY led by exports market (up 57% YoY) of Europe, America, South Africa and South East Asia. We believe enhanced addressable market from API & 30-100MW turbine, energy transition in Europe and emerging industries (paper and plastic recycling) will aid growth momentum going forward. Company has announced buy back of shares at Rs350/share (CMP 283, premium ~23.6%) upto Rs1.9bn. The Buyback offer size represents ~22.8% of company’s fully paid-up equity capital and free reserves on consolidated levels as on FY22.

Outlook

TRIV’s medium term outlook remains looks intact led by 1) robust enquiry pipeline, 2) healthy order book, 3) incremental opportunity with foray into 30-100MW market & API Turbines, 4) increasing opportunity arising from Europe due to energy transition and 5) favorable product mix. Given robust demand outlook and likely margin improvement we revise upwards our FY23/24 EPS estimates by 5%/11.4%. The stock is trading at PE of 52x/37.1x/30.2x FY23/24/25E. We roll forward our TP to FY25E with revised TP of Rs328 (Under Review earlier), valuing it at PE of 35x FY25E EPS and assign ‘BUY’ rating.

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Triveni Turbine - 04-11-2022 - prabhu