Triveni Turbine - Business Prospects Remain Strong; Valuation Turn Attractive: Centrum Broking

Centrum Broking Report

We remain optimistic on Triveni Turbine Ltd. amid -

1. continuous rise in quarterly order inflows (average quarterly run rate rose to Rs 3.6 billion in H1 FY23 versus Rs 3 billion in FY22 and Rs 2 billion over FY16-21),

2. positive trend in capex momentum across India (process co-gen, biomass), Europe (waste-to-energy and renewables) and South East Asia (agro and process industries) and

3. a strong financial profile, which will get a further fillip amidst robust growth uptick.

We believe the recent correction in stock price (partly owing to closure of buy back record date and partly due to profit booking in capital goods stocks) provides a good entry point as valuations are favorable at price/equity of 26 times FY25E earnings.

The growth momentum is likely to remain strong with Triveni Turbine guidance of 35% revenue growth in FY23E/24E each with sustenance of 19-20% operating margin profile. Our channel checks with peers suggest no slowdown in enquiries/inflows.

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