Triveni Engineering & Industries announced Q3FY23 results: Consolidated Q3FY23 & 9MFY23: Profit before tax (PBT) before exceptional items during Q3FY23 increased by 7.4% and declined by 27.5% in 9MFY23 as compared to corresponding periods of previous year, to Rs 198.7 crore and Rs 311.9 crore respectively. The profitability in sugar business is lower as the cost of sugar sold pertaining to the previous season includes the impact of sugarcane price increase for the Sugar Season. 9MFY22 included export subsidy of Rs 57 crore relating to the previous period. Higher profitability of the aggregate engineering businesses is owing to strong revenue increase of 45.8% and 35.8% during the current quarter and nine-month period under review over the corresponding periods last year. The total debt on a standalone basis as on December 31, 2022 is Rs 389.09 crore as compared to Rs 525 crore as on December 31, 2021. Standalone debt at the end of the quarter under review, comprises term loans of Rs 334.39 crore, almost all such loans are with interest subvention or at subsidized interest rates. On a consolidated basis, the total debt is at Rs 480 crore as compared to Rs 592 crore as on December 31, 2021. Overall average cost of funds is at 4.75% during Q3FY23 as against 4.15% in the corresponding period of previous year. The company holds surplus funds through short-term fixed deposits of Rs 1,278 crore. Our proposed buyback of Rs 800 crore is pending statutory approval. Commenting on the Company’s financial performance, Mr. Dhruv M. Sawhney, Chairman and Managing Director, Triveni Engineering & Industries Ltd, said: “Overall performance of the Company during the nine months ended December 31, 2022 has been satisfactory. In the current ongoing season, there is a declining trend of recoveries across the state of UP, for the ratoon crop, due to a variety of factors – mainly shortfall in rains in the grand growth period and thereafter, due to late rains in the month of October. However, in view of conducive weather, it is expected that there would be a catch-up in the balance part of the season for the plant crop and the gap will narrow down. We had addressed the issues relating to de-bottlenecking and modernisation in three of our sugar units and consequently, the crush during the quarter has increased by 25% over last year. However, the profitability of sugar operations has been impacted as cost of sugar sold in the current period includes the impact of the sugarcane price increase in the previous season, and it has not been fully offset by the increased sugar realization. We believe that it is the most appropriate time for the Government to reconsider the increase in the Minimum Support Price (MSP) of sugar to offset the impact of increased cane price. We have been able to get a remunerative export price having a substantial premium over the domestic sugar price, as a result of the Government making a timely announcement for the first tranche of exports of 6 million tonnes. In view of our increased distillation capacities, our production and sales volumes have increased substantially. However, the profit has not increased commensurately due to increased transfer price of B-heavy molasses, initial stabilization period of new distilleries and relatively lower margins on grain operations. There is an urgent need for the Government to rectify the pricing of ethanol produced from sugarcane juice and grain to improve the viability and enhance investments. It will help in faster setting up of additional capacity and achieve the targets of ethanol blending. The performance of engineering businesses is satisfactory with both turnover and profitability registering strong growth. In the Water business, we continue to selectively focus on projects with healthy returns, both in domestic and international markets. Water business has participated in many tenders and expects to received orders of substantial value. Orders in hand for Power Transmission are higher by 23% over corresponding previous quarter. In this segment, the Company’s high speed licence agreement with Lufkin Gears LLC expired in January 2023 and the business will now pursue the high-speed high-power segment independently with a focus on enhancing global market share in its identified target markets. We believe with an increased global presence, solid business model and strategy along with foray in defence will drive the Power Transmission business in the coming years. Our proposed buyback of Rs 800 crore is presently under approvals. The sale of stake in Triveni Turbine Limited has infused substantial funds in the Company, which, even after the proposed buyback, will meet the expansion requirements of the businesses and reduce finance costs on working capital requirements.” Result PDF
Sugar manufacturing company Triveni Engineering & Industries announced Q2FY23 results: H1FY23 consolidated: Revenue from operations (net of excise duty) at Rs 2571.56 crore, an increase of 22% Profit before exceptional items and tax at Rs113.16 crore Profit on the divestment of stake in Triveni Turbine Limited (TTL) at Rs1401.20 crore Profit after tax at Rs1454.21 crore Dhruv M Sawhney, Chairman and Managing Director, Triveni Engineering & Industries Ltd, said: “Overall performance of the company during the half year ending September 30, 2022, has been satisfactory. Sugar and distillery segments witnessed higher dispatches during Q2/H1FY23 with higher realisations. The profitability in the sugar business has been impacted by the higher cost of sugar produced in the SS 2021-22, owing to increase in sugarcane price, which could not be fully compensated by increased sugar realisation prices. Similarly, the profitability of the distillery segment is somewhat subdued due to increased transfer pricing of B-heavy molasses. We have commenced production of Ethanol/ENA from the grains and have now stabilised the operations. Both the engineering businesses have performed well with strong revenue growth and have robust closing order books coupled with healthy enquiry pipelines. Like the previous season, there is an estimated surplus of around 9 million tonnes after meeting the domestic consumption. International prices are robust and it is important that the export policy for the SS 2022-23 is announced by the government at the earliest so that export contracts could be entered into, taking advantage of a favourable international pricing environment and currency depreciation. We have commenced sugarcane crushing at six sugar units and the sugar unit at Ramkola is scheduled to commence during the second week of November. As a result of the debottlenecking and modernisation carried out at our three sugar units and based on the crop position presently prevailing, our performance, both in terms of crush and recovery, is likely to be better and the refined sugar may constitute approximately 60% of the total sugar production. We presently have a total capacity of 660 KLPD under the distillery segment, which we have planned to increase to 1110 KLPD by setting up two more distilleries. As further capacity will mainly be operated on sugarcane juice and grains, it may be necessary for the government to continue to positively address the pricing of ethanol produced from these feedstocks to maintain viability and to ensure that adequate capacities are set up to meet the target of 20% EBP by 2025. It will be a game-changer for the sugar industry and the risk profile of the business will greatly improve. And it will be a win-win situation for the sugar industry, farmers and the Government. Considering the commitment of the government, we are quite optimistic that appropriate price corrections will take place in future. The engineering business continue to perform well with healthy order books and enquiry pipelines. In the Power Transmission business, strong domestic economy and focus on growth in export markets is a key growth driver. In the Water business, the Company’s focus on both domestic and international markets is yielding results with many notable recent order wins and several bids under evaluation. During the quarter, the company has divested its entire 21.85% stake in Triveni Turbine Limited for net consideration of Rs 1,593 crore unlocking significant value for shareholders. This has led to unbundling of businesses and monetisation of non-core assets. As indicated earlier, the proceeds from the divestment will be inter-alia utilised for growth and expansion of business as well as for rewarding shareholders. To this effect, the Board of Directors, subject to approval of shareholders, has approved a proposal to buy back from equity shareholders of the company upto 2,28,57,142 equity shares at a price of Rs 350 each for an aggregate amount not exceeding Rs 800 crore, through tender offer on proportionate basis in accordance with the provisions of SEBI (Buy back of Securities) Regulations, 2018, and Companies Act, 2013, and rules made thereunder. We believe the company is well-positioned across its businesseses to leverage the market opportunities with its strong capabilities and strategic focus.” Result PDF