Triveni Turbine Ltd - Q2 FY14 Result - Quick View - CMP Rs.51, Maintain HOLD - Sushil Finance

The Q2 FY14 performance showcased continued impact of the ongoing general economic slowdown. Though, the order booking has remained slow, the Management stated that the enquiry books continued to remain strong indicating an anticipated quick revival following the trigger in the capex cycle. Due to extended slowdown in the domestic markets, the Company continued to focus on export markets and during the first half of current fiscal has managed to established customer contacts in 15 new countries. The outstanding order book as on September 30, 2013 stood at ~Rs.4,480 mn (however, many orders could not be consummated in Q2 FY14 were concluded in October, 2013 ~Rs.1,000 mn taking the total inflow during the first seven months to ~Rs.2,400 mn). The Management claims that the total enquiry book stood at >7.0 Giga-Watt (GW). In addition, the Company also mentioned that the order-booking has improved during the current fiscal and thus expects, the second half of the current fiscal to be better.

- During H1 FY14, the overall demand in the domestic markets stood at 263 MW in the domestic market (registering a decline of ~32% on an annual basis). Nevertheless, the Company has managed to maintain a market share of 55%. During H1 FY14, the exports contributed 31% of the order-inflow while the order booking from foreign clients consisted 26%.

- The borrowings have increased from Rs.0.5 mn in March, 2013 to Rs.60.6 mn in September, 2013; most of which are said to be temporary in nature. In addition, the substantial increase in the other current assets was largely due to revenue billed but not collected; similarly, the levels of inventories increased substantially as it included at least finished products to the tune of ~Rs.250 mn which were to be dispatched in Q3 FY14. The cash and cash equivalents also reduced from Rs.285.2 mn in March, 2013 to Rs.1.2 mn in September, 2013. However, the board of directors approved an interim dividend of Re.0.20 (20% per equity share of Re.1).

GE Triveni

The company, during H1 FY14 secured two orders totaling to 76 MW, which it claims to be a significant share of the total order booking in the above 30 MW segment of the industry. Moreover, it is in an advanced stage of getting its first overseas order. GE Triveni's first order for 35 MW has been commissioned and the performance has been as per the specifications. GETL is currently executing four turbines, a part of which will be dispatched during the current year itself.

During our previous update (Q1 FY14 Quick View, dated July 31, 2013) we had recommended a HOLD at the price of Rs.48. We maintain our HOLD rating for the stock on account of current industry-wide slowdown, though, we continue to maintain our positive outlook for the company.

Source : Equity Bulls

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