Triveni Turbine - Results above expectations; Export orders support growth - Nirmal Bang

Triveni Turbine Ltd. (CMP: Rs 61) (Target Price: Rs 60)

Triveni Turbines Ltd (TTL) has delivered better than expected results with revenue higher by 19.7% YoY and PAT growing by 48.2% YoY. Margins saw significant improvement on YoY as well as QoQ basis on account of higher share of export sales and aftermarket sales, and on favorable exchange rates. The declining revenue on account of slowdown in the domestic market has been offset by higher exports (up 158% YoY in 9mFY13). The order book at the end of Q3FY13 stands at Rs. 516 cr, which is executable over 9 months. Order inflow for the quarter was Rs 100 cr.

Based on the current trend in order execution and expected export order inflows in the coming quarters on account of a strong enquiry book, management has indicated single digit growth in revenue and double digit growth in profitability for FY13, and is confident of continuing the growth story into FY14. At CMP, the stock trades at 19.2x & 16.3 x its FY13E & FY14E EPS respectively and 11.7x & 9.7x its FY13E & FY14E EV/EBITDA respectively. Though we are positive on the long-term prospects of the company, we are neutral on the stock post the sharp run up in the prices. We had recommended to book partial profits after the stock achieved our revised target of Rs 60, generating a return of 44.5% in a span of 6 months, and to HOLD the remaining shares from a long term perspective.

Source : Equity Bulls

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