Triveni Turbines - Q4FY13 Result Update - Nirmal Bang

- Triveni Turbine (TTL) posted 4QFY13 revenue of Rs1.9bn, a robust growth of 33.5% YoY, driven by healthy execution of the order book and rising contribution of after-market services. However, change in revenue mix from domestic and exports market based on the delivery schedule (high margin exports accounted for 25% of revenue compared to 29% in previous quarter) has led to relatively softer operating margin of 22.2% for the quarter compared to usual run rate of 24%-25%.

- However, for FY13 the operating margin grew 90bps YoY to 24.9%, which the management expects to maintain going forward.

- Driven by lower interest obligation and higher other income, on expected lines post repayment of debt in 3QFY13, PAT grew by a healthy 22.8% YoY to Rs306mn, compared to our estimate of Rs278mn.

- We re-iterate our thesis that rising share of exports and after-market services would fuel revenue growth along with ensuring superior margins.

- We retain our Buy rating on Triveni Turbine with a target price of Rs68 based on 15xFY15E EPS.

Source : Equity Bulls

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