 "Triveni Turbine hits new high, up 16% amid heavy volumes on healthy outlook")
Shares of Triveni Turbine hit a record high of Rs 885, as they soared 16 per cent on the BSE in Tuesdays’ intra-day trade amid heavy volumes on a healthy outlook. The stock surpassed its previous high of Rs 842.55 touched on August 14, 2024. In the past nine trading days, the stock has zoomed 44 per cent.
At 01:10 pm; Triveni Turbine was trading 14 per cent higher at Rs 871.75, as compared to 0.30 per cent decline in the BSE Sensex. The average trading volumes at the counter jumped over three-fold. A combined 27.04 million shares representing 8.5 per cent of total equity of Triveni Turbine changed hands on the NSE and BSE.
Triveni Turbine is the domestic market leader in steam turbines up to 30 MW. The company designs and manufactures steam turbines up to 100 MW, and delivers robust, reliable, and efficient end-to-end solutions.
The management expects to maintain a robust business performance in the medium term. The expectation is supported by a substantial order booking in the renewables, API as well as Industrial Power Generation segment. The Aftermarket business is also showing good promise in terms of growth and is bolstered by the standard range of offerings, including spare parts, services and refurbishment, the management said.
In the September quarter (Q2FY25), Triveni Turbine reported a strong revenue growth of 29 per cent year-on-year (YoY) at Rs 501 crore, led by superior execution in the Product segment and aftermarket business. Earnings before interest, tax, depreciation and amortization (ebitda) margin improved by 306 bps YoY to 22.2 per cent, due to better revenue mix and a drop in other expenses. Profit after tax grew 42 per cent YoY at Rs 91 crore.
The order book grew by 22 per cent YoY at Rs 1,796 crore, supported by 33 per cent YoY growth in order inflows in H1FY25. Strong growth in export orders by 74 per cent YoY, combined with an improvement in export contribution (61 per cent mix), provides visibility for both revenue and profitability for FY25, according to Geojit Financial Services.
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Domestic order inflow remains weak in H1FY25 due to election, however Triveni Turbine expects an improvement in the cycle on account of higher government spending and growing demand from sectors like steel, cement and renewable energy.
The brokerage firm expects the increasing share of the export order book, which has a superior margin profile would aid profitability in the coming quarters. The foray into the US market provides untapped opportunity on the refurbishment side which would drive the aftermarket revenue growth. The stock however, was trading above target price of Rs 835 per share.
Meanwhile, Motilal Oswal Financial Services (MOFSL) expects Triveni Turbine to continue to benefit from international order inflows, particularly from the ongoing global shift toward renewables, while domestic inflows will ramp up in the next few quarters from key end-user industries such as steel, cement, chemicals, sugar, distilleries, paper and pulp.
For Triveni Turbine, the share of exports has gone up to 46 per cent in FY24 from 35 per cent in FY16. This share is poised to increase further with the company’s foray into the US market, where it is increasing employee headcount and setting up offices.
Slowdown in capex initiatives, intensified competition, technology disruption, inability to innovate and launch new products, and geopolitical headwinds resulting in a sharp slowdown in exports and aftermarket segments are key risks and concerns, MOFSL said. However, the stock achieved brokerage firm’s target price of Rs 830 per share.