Q3FY21 Result Update - Triveni Engineering - ICICI Direct

Triveni Engineering (TEL) reported strong Q3FY21 results with sustained domestic sugar & distillery volumes & robust growth in operating profits. Consolidated revenue increased 5% to Rs. 1123.1 crore led by 6.8% growth in sugar segment & 7.2% growth is distillery segment. Sugar volume increased by 6.7% to 2.71 lakh tonnes mainly on account of higher domestic sale quota. The company also exported 14244 tonnes of sugar pending from previous seasons export quota. The company is holding 2.82 lakh tonnes of sugar valued at Rs. 30.9 / kg. Distillery volumes increased by 3.8% to 2.24 crore litre. Distillery realisation was up 1.5% to Rs. 47.8/litre. Engineering businesses continued to remain impacted by pandemic related execution delays. Power transmission sales were down 52.8% to Rs. 21.3 crore mainly due to deferment of supplies from Q3 to Q4. Water business sales was down by 14.7% to Rs. 60.2 crore. Outstanding order book for power transmission & water business was Rs. 160 crore & Rs. 827 crore, respectively. Operating profit increased 82.6% to Rs. 160.5 crore on account of lower sugar inventory valuation at the end of Q2FY21. Led by higher operating profit & lower interest cost, PAT increased to Rs. 94.7 crore as against Rs. 45.2 crore in corresponding quarter.

Valuation & Outlook

The company has been able to reduce its overall debt by ~Rs. 1000 crore in last one year. Further, we believe increase in distillery capacities would result in sustainable growth without building up any working capital debt. We value the stock at 1.3x FY22 book value with a revised target price of Rs. 100/share (earlier target price was Rs. 95/share) and maintain BUY rating.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Triveni_Q3FY21.pdf

Shares of TRIVENI ENGINEERING & INDUSTRIES LTD. was last trading in BSE at Rs.72.5 as compared to the previous close of Rs. 75.4. The total number of shares traded during the day was 44311 in over 313 trades.

The stock hit an intraday high of Rs. 76.5 and intraday low of 72.3. The net turnover during the day was Rs. 3286439.

Source : Equity Bulls

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