Buy Triveni Engineering & Industries, target price Rs 306: Centrum Broking

Centrum Broking has buy call on Triveni Engineering & Industries with a target price of Rs 306. The current market price of Triveni Engineering & Industries is Rs 226.

Time period given by analyst is one year when Triveni Engineering & Industries Ltd. price can reach defined target.
Triveni Engineering & Industries Ltd., incorporated in the year 1932, is a Small Cap company (having a market cap of Rs 5493.88 Crore) operating in Sugar sector.


Triveni Engineering & Industries Ltd. key Products/Revenue Segments include Sugar, Alcohol, Contract Revenue, Other Operating Revenue, Gears & Gear Boxes, Power, Sale of services, Mechanical Components, Bagasse, Diesel, Petrol & Lubricants, Others, Molasses, Power Generation, Scrap, Other Goods (Traded) for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 1195.08 Crore, up 6.45 % from last quarter Total Income of Rs 1122.65 Crore and down -.29 % from last year same quarter Total Income of Rs 1198.50 Crore. Company reported net profit after tax of Rs 101.84 Crore in latest quarter.


Investment Rationale
For 1QFY23, the brokerage expects TRE to post consolidated revenue growth of 7.3% on yoy basis to Rs11.9bn (Rs11.1bn) primarily driven by distillery division (~60% enhanced capacity as compared to last quarter same year and higher sugar volumes). EBITDA margins for TRE are expected to be lower as compared to 1QFY22 owing to 1) crushing for this season was on the lower side; and 2) there was export incentive recorded in 1QFY22 of ~Rs450mn. Therefore, it expects TRE to post 11.6% EBITDAM for the quarter vis-à-vis 13.5% in 1QFY22. Modest revenue growth and lower margins would entail TRE to post decline of 8.0% yoy on consolidated earnings to Rs849mn vis-à-vis Rs923mn in 1QFY22.