Shares of Triveni Engineering and Industries Limited (TEL) have delivered stellar returns to its investors, more than tripling their wealth in just the last 1 year. The stock has surged to ₹272 currently from around ₹72 a year ago, logging 278 percent gains in this period. In comparison, the benchmark Nifty has added 13 percent in this period.
An amount of ₹10 lakh invested in this stock a year ago would have turned into over ₹37 lakh today.
This stock has been a boon for long-term investors, rising over 1,200 percent in the last ten years.
Triveni Engineering & Industries Limited is one of the largest sugar manufacturers in India and the market leader in its engineering businesses comprising high-speed gears, gearboxes, and water treatment solutions.
The company has been an outperformer on the back of robust financials, a strong order book and rising sugar prices.
Recently, the company reported its earnings for the quarter ended December 2021. The company's consolidated net profit rose 37 percent to ₹130 in Q3FY22 as against a net profit of ₹94.6 crore in the year-ago quarter. Its total income also rose to ₹1,242.40 crore in the quarter under review from ₹1,130.73 crore in the year-ago quarter.
The firm informed that it has an order book of ₹1,808.39 crore for combined engineering businesses and it consolidated debt stood at ₹592 crore as of December 31, 2021.
Post the earnings, the company's CMD Dhruv M Sawhney said that the continuance of exports and/or substantial diversion of sugar for ethanol will be key to maintaining the sugar prices.
"We hope that the Government addresses the long-pending increase in Minimum Selling Price (MSP) of sugar to maintain the viability of sugar mills and to preserve their cane price paying capacity," he added.
The management added that a broad-based economic recovery which is already underway is likely to keep the demand strong for engineering businesses. Also, the power transmission business is poised for strong growth in the coming years.
"Sugar segment profitability would improve with surging domestic & global sugar prices. We estimate sugar realisation of ₹34-37 per kg in FY22-24E. The company is expected to generate ₹1165 crore of free cash flow in the next three years, which would be utilised for ₹400 crore capex, debt reduction, buybacks & dividends," the brokerage firm ICICI Direct stated.
Among peers, Shree Renuka Sugars rallied 280 percent in the last 1 year, a little higher than Triveni. Meanwhile, Balrampur Chini Mills surged 154 percent, Dhampur Sugar Mills advanced 150 percent whereas Dalmia Bharat and EID Parry added around 25 percent each.
