Triveni Turbine accumulation; goal of Rs 450: Prabhudas Lilladher

 Triveni Turbine accumulation; goal of Rs 450: Prabhudas Lilladher

In their research report dated November 02, 2023, Prabhudas Lilladher suggested an add rating on Triveni Turbine with a target price of Rs 450.

The Triveni Turbine study report by Prabhudas Lilladher

Strong aftermarket sales (up 71.4% YoY) were the primary driver of Triveni Turbine's (TRIV) announced revenue increase of 32.4% YoY. Due to rising overseas travel costs and high subcontracting charges in SADC, the EBITDA margin remained constant despite an improvement in the gross margin. Due to the robustness of steel and distilleries and the growth in the cement industry, the domestic inquiry pipeline is strong. The Americas, Europe, and South East Asia are the regions driving global demand in sectors including biomass, process cogeneration, and independent power plants. The aftermarket business is seeing strong demand, especially in the areas of automation and upgrading. In an effort to spur development, the firm is broadening its worldwide service offerings. With an emphasis on obtaining higher value orders, TRIV will keep adding qualified personnel to strengthen its R&D capacities for quality improvement and new product development.

Prospects

With a robust order book that continues to generate inflows across all of its businesses, an impressive pipeline of inquiries (up 33% YoY) across markets, a growing share of higher margin shipping and aftermarket sales, strong momentum in both technological and API drive turbines, and all of these factors, we believe TRIV's prospects will remain strong. We keep our "Accumulate" rating on the stock due to the recent surge in price, and we roll ahead to September 25E with a revised TP of Rs450 (previously Rs419), valuing the company at 35x September 25E (previously 37x FY25E).