17 May 2021
4QFY21 Results Update | Sector: Textiles
Trident
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Financials & Valuations (INR b)
Y/E Mar
2021
2022
Sales
45.3
57.2
EBITDA
8.2
11.1
PAT
3.3
5.3
EBITDA (%)
10.6
13.1
EPS (INR)
0.7
1.1
EPS Gr. (%)
3.2
60.9
BV/Sh. (INR)
6.7
7.6
Ratios
Net D/E
0.4
0.4
RoE (%)
10.4
14.9
RoCE (%)
7.7
11.5
Payout (%)
5.9
10.0
Valuations
P/E (x)
24.2
15.1
EV/EBITDA (x)
11.5
8.6
Div Yield (%)
0.2
0.7
FCF Yield (%)
1.0
0.3
TRID IN
4,978
82 / 1.1
19 / 4
13/102/170
243
CMP: INR16.1
TP: INR18.4 (+15%)
Buy
Growth momentum continues; order book visibility improves
Revenue in-line; EBITDA/PAT below estimates
Trident (TRID) reported a strong performance on the back of demand revival
in the Home Textiles and Paper segments. The demand trend in Home
Textiles is expected to continue in the upcoming quarters as well, led by
order book visibility for the next six months. However, demand revival in the
Paper segment has been impacted by the second COVID wave. Recovery is
expected in the coming quarters as offices and educational institutions start
to open up.
Although the performance was below our estimates, we maintain our
earnings estimates for FY22/FY23 on an improving demand outlook.
Maintain
Buy.
2023
64.8
12.6
6.6
13.6
1.3
23.3
8.8
0.2
16.0
12.7
10.0
12.2
7.2
0.8
12.1
Bath and Bed Linen revenue up 52% and 109% YoY, respectively
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Mar-21 Dec-20 Mar-20
73.0
73.0
71.1
0.9
0.9
1.0
3.6
3.6
2.1
22.4
22.5
25.9
TRID reported standalone revenue of INR13.5b (est. INR13.8b), up 36% YoY.
EBITDA margins expanded 330bp to 16.8% on operating leverage. EBITDA
margins expanded despite gross margin contraction of 155bp to 54.1%. 4Q
EBITDA, adjusted for forex gains, was up 69% YoY to INR2.3b (est. INR2.6b).
Consequently, adj. PAT grew 3.4x YoY to INR976m. On a QoQ basis,
revenue/PAT grew 5%/3%, whereas EBITDA declined 4%.
FY21 consolidated revenue/EBITDA de-grew 4%/2%, whereas adj PAT grew
3% YoY. The company generated CFO of INR5b in FY21 v/s INR12.1b last
year; higher inventory and trade receivables led to lower CFO.
Textiles revenue was up 46% YoY (+2% QoQ) to INR11.3b, with EBIT margins
expanding 700bp YoY (-300bp QoQ) to 9.8% (after forex adj). Capacity
utilization in 4QFY21 in Bath and Bed Linen stood at 61% (v/s 62% in
3QFY21) and 92% (v/s 101% in 3QFY21), respectively. On a QoQ basis,
overall segmental revenue grew 2%, while EBIT declined 21%.
Paper and Chemicals revenue grew 2% YoY (+20% QoQ) to INR2.2b, with the
EBIT margin expanding 80bp YoY (+650bp QoQ) to 27.8%. Capacity
utilization in the Paper segment stood at 92% (v/s 87% in 3QFY21). On a
QoQ basis, overall segmental revenue/EBIT was up 20%/56%.
Net debt stood at INR14.2b as of Mar’21 v/s INR16.1b as of Mar’20.
The Home Textiles segment has sustained the demand momentum in the
current quarter, with Bath and Bed Linen segments posting revenue growth
of 52% and 109% YoY, respectively. Exports had a robust 64% contribution
to the total revenue for the quarter.
The yarn project has been proposed at a total cost of INR11.4b, with the
implementation happening under three phases. However, the company has
decided to go ahead with the implementation of a single phase only, which
is near completion; it would review the capex in due course, in line with the
strategic plan to achieve ‘Vision 2025’.
Highlights from press release
Sumant Kumar - Research Analyst
(Sumant.Kumar@MotilalOswal.com)
Research Analyst: Darshit Shah
(Darshit.Shah@motilaloswal.com) /
Yusuf Inamdar
(yusuf.inamdar@motilaloswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.