Triveni Engg drops on recording dismal Q2 numbers

Triveni Engineering & Industries declined 2.28% to Rs 405.90 after the company reported consolidated net loss of Rs 19.20 crore in Q2 FY25 as against net profit of Rs 29.11 crore posted in Q2 FY24.

Revenue from operations (excluding Excise duty) increased 5.83% YoY to Rs 1,490.95 crore during the quarter.

The company recorded a pre-tax loss of Rs 30.26 crore, compared to a profit before tax of Rs 39.16 crore posted in Q2 FY24. The results include a loss of Rs 12.4 crore (before tax) pertaining to the recently acquired subsidiary, Sir Shadi Lal Enterprises (SSEL).

In Q1 FY25, EBITDA stood at Rs 18.3 crore, recording de-growth of 75.7% from Rs 75.3 crore posted in same quarter last year. EBITDA margin contracted to 1.2% in Q2 FY25 from 5.3% posted in Q2 FY24.

 

Revenue from sugar business slipped 5.1% to Rs 959.3 crore in Q2 FY25 from Rs 1,011 crore in Q2 FY24. The profitability of sugar business was lower due to lower contribution margins and higher charge of off-season expenses by Rs 28.90 crore owing to early closure of the sugar season 2023-24.

Alcohol (distillery) business reported revenue (net of excise duty) of Rs 405.7 crore during the quarter, up 17.9% as compared with Rs 344.1 crore in Q2 FY24. Production declined 3.2% YoY to 39,238 KL while sales volumes increase 7.1% to 55,181 KL in Q2 FY25 over Q2 FY24.

The profitability was adversely affected due to shortage of molasses-based feedstock resulting from the policy decision of GoI restricting diversion of sugar to BHM and sugarcane juice. It led to closure of distilleries for some period during Q2. It also has been impacted due high cost of procurement of maize, thereby significantly reducing the margins of maize operations.

Revenue from power transmission business increased 30.1% to Rs 102.1 crore in Q2 FY25 from Rs 78.5 crore posted in same quarter last year. The company witnessed good demand for its products including high technology compressor gearboxes, high power small hydro turbine applications, high power API gearboxes, integrally geared compressor gears etc.

The order book stood at Rs 141.2 crore during the quarter, compared to Rs 89.5 crore in Q2 FY24, including prestigious breakthrough orders in both the Gears and Defence businesses.

Further, revenue from water business dropped 35.6% to Rs 40.0 crore in Q2 FY25 from 62.1 crore in Q2 FY24, due to delay in execution in certain projects and delay in award of new orders wherein we had submitted lowest bids.

The outstanding order book as on September 30, 2024 stood at Rs 1,726.0 crore, which includes Rs 979.6 crore towards O&M contracts for a longer period of time.

Meanwhile, the board has approved a capex of approximately Rs 20 crore for the enhancement of production capacity in the Indian Made Indian Liquor (IMIL) business.

Dhruv M. Sawhney, chairman and managing director, Triveni Engineering & Industries, said, Overall profitability of the Company during the half year ended September 30, 2024 was subdued, impacted by lower margins in the Alcohol business and losses of new subsidiary SSEL which was recently acquired.

For sugar season, the profitability in the first half of financial year remains muted due to expensing of fixed expenses during the off-season period, which was much longer during the current period. However, Engineering businesses performed well both in terms of profitability and order booking, resulting in combined closing order book of Rs 2070.9 crore, an all-time high for the Company

In our Engineering businesses, the Power Transmission business continues to progress well with healthy demand from traditional segments and markets while making strides with new customers especially in global markets along with diversification of its solutions portfolio. In the Water business, we are pleased to receive two new major orders which improve visibility of revenues in the near future. The business is well placed on a few bids of substantial value where we expect more updates in the next couple of quarters.

Triveni Engineering & Industries (TEIL) is a diversified industrial conglomerate having core competencies in the areas of sugar, alcohol, power transmission and water. The company is one of India's largest integrated sugar manufacturers and one of the largest ethanol manufacturers, while making significant contributions in Power Transmission and in Water & Wastewater treatment solutions.

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