The Heavy Electrical Equipment sector in India is pivotal for the energy landscape, contributing significantly to the economy. With an installed power generation capacity of 298,325 MW (conventional) and 143,645 MW (renewable) as of March 2024, the industry is projected to grow by USD 76.24 billion at a CAGR of 14.3% from 2023 to 2028.
With a market capitalization of Rs 20,824.12 crore, the shares of Triveni Turbine Ltd closed at Rs 655.10 per share, increased around 1.53 percent as compared to the previous closing price of Rs 645.25 apiece.
Brokerage Recommendations:-
Sharekhan, one of the well-known brokerages in India, gave a ‘Buy’ call on power stock with a target price of Rs 870 apiece, indicating a potential upside of 32 percent from Thursday’s price of Rs 655 per share.
Here is the rationale for such a Bullish upside of 32%:-
● As per the report, domestic sales rose 32% year-over-year to Rs. 279 crore, while the product segment reached Rs. 336 crore, a 26% increase. Product orders grew 30%, driven by renewables, industrial, power, and API sectors. Aftermarket revenue surged 38%, now contributing 33% to total revenue, up from 31%.
● Management anticipates strong growth, backed by a significant order backlog in Renewable, API, and IPG turbines and market expansion. Aftermarket business shows promising growth with expanded services for turbines. Domestic inquiries are robust, while the US business may incur a Rs. 25 crore FY25 loss.
● The order book is at Rs. 1,796 crore, up 22% year-over-year, with exports at Rs. 1,086 crore (up 71%) and domestic orders at Rs. 709 crore (down 16%). Domestic inquiries are increasing, with anticipated conversions in H2 FY2025. Aftermarket orders rose 12% to Rs. 283 crore; product orders grew 24% to Rs. 1,512 crore.
● The company’s new US subsidiary aligns with its strategy to penetrate one of the largest, most advanced markets, supported by energy efficiency incentives. Besides promoting new products, it will target the aftermarket for installed turbines. The subsidiary may see a Rs. 25 crore loss in FY25, with minor contributions expected by FY26.
Financial Performance:-
Recently, the company announced its financial performance in which revenue magnified by 29 percent on a year-on-year basis from Rs 388 crore in Q2FY24 to Rs 501 crore in Q2FY25. However, on a quarter-on-quarter basis, revenue increased by 8 percent from Rs 463 crore in Q1FY25 to Rs 501 crore in Q2Y25.
Moreover, net profit increased by 42 percent on a yearly basis from Rs 64 crore in Q2FY24 to Rs 91 crore in Q2FY25, meanwhile, on a quarter-on-quarter basis, net profit zoomed by 14 percent from Rs 80 crore in Q1FY25 to Rs 91 crore in Q2FY25.
Company profile:-
Triveni Turbine Limited is primarily engaged in the business of manufacturing and supplying power-generating equipment and solutions and has manufacturing facilities in Bengaluru, Karnataka. Approximately 6,000 steam turbines supplied by the Company are installed across 20 industries.
Written by:- Abhishek Singh
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