Triveni Engineering is the largest integrated sugar manufacturer in India and the market leader in its engineering businesses, which include high-speed gears, gearboxes, and water and wastewater treatment solutions. The company currently has seven sugar mills in operation. Additionally, it is involved in other ventures such as retail stores operated by Triveni Retail Ventures, and trading of various packaged fast-moving consumer goods, including sugar.
Due to its large presence in western Uttar Pradesh, which saw less impact from weather vagaries, and addressing issues relating to de-bottlenecking and modernization in three of its sugar units, the company's sugar business is in a favourable position. It is projected to increase production by 7–8% in FY2023, with even higher production anticipated in FY2024. A potential decline in Maharashtra sugar production is expected to lead to lower inventory levels by the end of the year, resulting in continued growth in sugar realizations in the upcoming quarters. The company's ethanol production is likely to jump from 18 crore liters in FY 2023 to 32 crore liters in FY 2025, which will help in improving profitability and generating high cash flows in the coming years. Furthermore, a hike in realization due to rising demand for bio-fuels is expected to improve the profitability of distillery businesses in the coming years.
In terms of its power transmission business, the company exhibited a robust revenue growth of 29% YoY in 9MFY2023, and the outstanding order book as of December 31, 2022, stood at Rs. 262.7 crore, which also includes long-duration orders of Rs. 120 crore. Furthermore, the expiration of the High-Speed License Agreement with Lufkin Gears LLC in January 2023, the Make-in-India initiatives of the Government of India, and the increase in industrial capital expenditure in various sectors are all expected to boost the company's market share.
Sharekhan has maintained its 'Buy' recommendation on the stock with an unchanged target price of ₹340 apiece.
Five analysts polled by MintGenie on average have a 'strong buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.