Triveni Turbine Ltd. share price target

Stung by GST blues and lackluster domestic order activity, Triveni's income from operations and post tax earnings declined to the lowest level in at least nine quarters. Blood curdling fall in sales was explained by deferment of orders and lower order intake in first half of last financial year. Though revenue recognition gathered pace in Q2, most disgruntling is skimpiness in domestic order booking - down 11.6% to Rs 156 crs in H1 from Rs 176 crs...

Exports Order Inflow Nearly Doubles; Domestic Market TurnsVolatile: Exports order booking grew by whopping 92.0% during H1FY18 to Rs.2,551mn accounting for two-thirds of inflows. However, volatile domestic demand and highcompetition lowered domestic order booking by 12.0% to Rs.1,555mn in H1FY18, consequently market share as well dropped to ~ 60.0% by end Q2FY18.

Triveni Turbine Ltd (TTL) is the domestic market leader in steam turbines up to 30 MW. The Company designs and manufactures steam turbines up to 100 MW, and delivers robust, reliable and efficient end-to-end solutions....

Market leadership in Q1FY18 order booking: Overall order inflows were higher by 41.0% to reach Rs.2153mn by end of Q1FY18. Domestic inflows grew by 53.0% to Rs.987mn and exports inflows were higher by 32.0% to Rs.1165mn.

Owing to healthy return ratios, coupled with the GE technology/brand, and post the recent price correction, we upgrade to BUY with a TP of Rs 147/sh (30x Jun-19E EPS). Triveni Turbines (TRIV) 1QFY18 revenue declined 23.2% YoY. This was on the back of a malware attack leading to lower exports and GST-led deferrals in the domestic market. Increase in operating costs (+470bps YoY) for setting up service centres led to ~470bps decline in EBITDA margin at 15.8%. APAT declined 56.1% YoY to Rs 96mn. Order booking improved 41% YoY to Rs 2.2bn, resulting in a closing order book of Rs 7.3bn (+10.5% YoY; 14.8% QoQ).

Triveni turbines revenue in Q4FY17 has declined 10.8% YoY due to lower exports and rescheduling of dispatches of some large orders which were delivered in the current quarter. The EBITDA margins in Q4FY17 have fallen by 573bps on the back of increased employee and operating cost to reach 19.6% from 25.3% for corresponding last year. A surge in other income (+209.7%) leads PAT to Rs.266 mn.

Triveni Turbines (TRIV) 4QFY17 revenue declined 14.6% YoY, owing to lower exports (-21.6% YoY), led by rescheduling of dispatches at the last minute. Increase in employee and operating costs led to ~460bps decline in EBITDA margins to 21.0%. Driven by higher other income (Rs 101mn, 610% YoY), APAT stood at Rs 272mn (-20.6% YoY).

Part of the Triveni group, Triveni Turbine Limited (TTL) is one of the world's largest manufacturers of sub-30 MW steam turbines which finds its application in industrial & renewable power solutions. It enjoys market leadership in the duopolistic Indian sub-30 MW steam turbine market with a dominant 60 % share despite strong competition from Siemens. It has ramped up its exports over the past 2 years and boasts of a track record of over 3,000 steam turbines installed and 12 GW power generation capacity created in over 70 countries. It also entered into a joint venture with global major General Electric in 2010 where it offers a portfolio of steam...

We arranged an investor meet with Nikhil Sawhney, VC & MD of Triveni Turbine Limited (TRIV). He reiterated the companys growth strategy for the international markets, which is being reflected in the company?s growing enquiry base.

To stay competitive, Triveni has carved out a niche in Indian capital goods space - up to 30 MW turbines - by purveying its wares to cogeneration based captive power plants, renewable based independent power plants, agro-based cogeneration units and renewable waste heat. In addition to stimulus provided by the 'National Capital Goods Policy' - shoring up domestic production; technology sharing; export promotion; easy finance availability, India's humongous renewable energy capacity addition plans (175GW by 2022 from some 50 GW installed now) bodes well for the capital...