Shares of Triveni Turbine rallied 10 per cent to hit a new high of Rs 329.95 on the BSE in Tuesday’s intra-day trade amid heavy volumes on a strong business outlook.
The stock surpassed its previous high of Rs 312.70 touched on February 22, 2023. In comparison, the S&P BSE Sensex was down 0.5 per cent at 59,009, at 01:56 pm. The average trading volumes on the counter had jumped nearly three-fold so far. A combined 10.14 million shares, representing 3.2 per cent of the total equity of the company, had changed hands on the NSE and BSE.
The management has guided around 20 per cent revenue growth in the next 2-3 years with profit before tax of around 20-21 per cent given the robust order book and enquiry pipeline.
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Meanwhile, the stock will be added in the FTSE Global Smallcap Index with effect from March 20, 2023.
Triveni Turbine is majorly enagaged in the area of steam turbines manufacturing up to 100 MW size. It is a dominant player in the industrial steam turbines of up to 30 MW in India and also among the leading manufacturers of industrial steam turbines in the >5 to 30 MW range globally.
During the October-December quarter (Q3FY23), Triveni Turbine’s order booking reached a new high of Rs 420 crore leading to a total order booking of Rs 1,139 crore during 9MFY23, up 26.5 per cent when compared to the same period last year and only marginally below the order booking for the entire FY22.
With a solid performance across its geographies and business segments, the company had an impressive closing order book of Rs 1,232 crore, up 33 per cent year-on-year as on December 31, 2022, placing it in an extremely favourable position for the year to come, the company’s management said.
With a strong focus in enquiry generation and aggressive coverage plans both in domestic and international markets, the management expects to convert large opportunities in the imminent future.
With revival in capex activities across both domestic and international markets and consequent healthy uptick in order inflows, analysts at Centrum Broking expect company's revenue/earnings growth to bounce back strongly (revenue/EPS CAGR of 29 per cent/62 per cent over FY22-25E), which will further accentuate its superior financial metrics.
"The healthy growth momentum in order inflow will be led by corporate capex revival in the domestic market, Europe’s increasing focus towards renewables segment, resumption of normal business activities in South East Asia post Covid-19, penetration in new geographies of LatAM and Africa, rising opportunities in 30-100 MW range from international markets, pick up in API turbines enquiries and rising presence of after-market services in overseas markets", the brokerage said. It has a ‘Buy’ rating on the stock and a target price of Rs 345.
Ordering activity is expected to continue with its growth momentum given a healthy enquiry pipeline, which grew 31 per cent YoY led by exports market (up 55 per cent YoY) from Southeast Asia, Europe, West Asia, North America. The margins are expected to sustain within the 19-21 per cent range in the medium term driven by better product mix (led by exports and aftermarket) and operating leverage, analysts at Prabhudas Lilladher said, while maintaining a ‘Buy’ rating at a target price of Rs 340 (Rs 328 earlier), valuing it at a PE of 35x FY25E.