21 January 2016
3QFY16 Result Update | Sector: Capital Goods
Triveni Turbine
BSE SENSEX
24062
Shares O/s (cr)
52-W H/L Range (INR)
1/6/12 Month Perfo
Market Cap. (INRCr)
Market Cap. (US$ m)
NIFTY
7309
33.0
152/94
0/-18/-9
3267
488
CMP: INR99
YEAR
END
FY15
FY16E
FY17E
SALES
A.PAT
A.EPS
(INR)
2.3
2.9
3.7
A.EPS
Gr.(%)
11%
28%
26%
(INRCr) (INRCr)
651
828
993
75
97
122
TP: INR150
PE
(X)
43
34
27
P/BV
(X)
17.3
13.8
11.0
EV/
EBITDA(X)
32.4
26.0
21.0
DIV. YLD
(%)
0.7%
0.9%
1.1%
Buy
A.ROE
(%)
33%
34%
34%
Results - In-line; order inflow momentum continues; strong guidance; growth story intact
Topline beat offset by a decline in margins; profits in-line: Revenues at INR 197cr, +31% YoY are 12% above our
estimate of INR 175cr. EBITDA came in at INR 40.9cr, +26% YoY with EBITDA margins at 20.8%, lower by 80bp YoY
[Est 21.8%]. PAT came in at INR 27.5cr +17% YoY, in-line with our estimates.
Order Inflow momentum continues: Order intake for the quarter was encouraging with an inflow of INR 200cr, +18%
YoY. The outstanding standalone order book stood at INR 680cr, higher by 13% YoY. Order inflow is expected to gain
momentum as contribution from the GE-Triveni JV starts kicking in majorly from 4QFY16 onwards as the company
is expecting huge order wins from this JV which would get executed FY17E onwards.
Strong guidance for 4QFY16 & FY17: The management claims that 4QFY16 should witness very strong topline
growth along with high margins on the back of higher contribution from exports and aftermarket businesses as some
of these high margin orders which were supposed to get serviced in 3QFY16 have spilled over into 4QFY16. Further,
the management has guided for FY17 growth to be in the 20-25% range, in- line with that of FY15/16E.
3QFY15
150
119
32
6
0
4
0
34
11
24
24
21.6%
32%
2QFY16
175
136
42
4
0
4
0
42
14
28
28
23.8%
33%
3QFY16
197
157
41
4
0
3
0
41
14
28
28
20.8%
33%
17%
17%
0%
0%
19%
-1%
-14%
-4%
yoy
31%
32%
26%
qoq
12%
16%
-2%
FY15 FY16E
651
528
123
9
2
16
22
136
43
91
75
32%
828
675
153
13
1
22
0
143
47
97
97
33%
5%
10%
7%
28%
38%
yoy
27%
28%
25%
38%
INRCr
Revenue
Expenditure
EBITDA
Other Income
Interest
Depreciation
E/O Exp
PBT
Tax
PAT (Reported)
PAT (Adj)
EBITDA (%)
Tax rate (%)
18.8% 18.5%
* Quarterly figures are standalone; Full year figures are consolidated
Valuation and view
Triveni Turbines is currently at an inflection point wherein its exports, aftermarket and JV with GE together have
increased their contribution to 60% of revenues and are expected to decouple Triveni from the vagaries of the
domestic product market.
With focus and a strong competitive proposition offered by Triveni in high margin and fast growing segments of
exports and aftermarket, the company is expected to grow its profits at 27% CAGR over FY15-17E. Besides,
Triveni's business generates best in class ROE of 33% which is likely to improve going forward with an increase in
capacity utilisation. Debt free balance sheet, robust free cash generation and low capex intensity results in a
dividend payout ratio of 40% which is slated to rise in future. We value the company at INR 150 on DCF basis and
maintain our BUY rating.
Jehan Bhadha
(jehan.bhadha@MotilalOswal.com); Tel: +91 22 33124915

Disclaimer: This document has been prepared by Motilal Oswal Securities Limited (hereinafter referred to as Most) to provide information about the company(ies)
and/sector(s), if any, covered in the report and may be distributed by it and/or its affiliated company(ies). This report is for personal information of the selected
recipient/s and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or inducement
to invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report
is not for public distribution and has been furnished to you solely for your general information and should not be reproduced or redistributed to any other person
in any form. This report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs
of individual clients. Before acting on any advice or recommendation in this material, investors should consider whether it is suitable for their particular
circumstances and, if necessary, seek professional advice. The price and value of the investments referred to in this material and the income from them may go
down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance, future returns are not
guaranteed and a loss of original capital may occur.
MOSt and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group. We and our affiliates have
investment banking and other business relationships with a some companies covered by our Research Department. Our research professionals may provide input
into our investment banking and other business selection processes. Investors should assume that MOSt and/or its affiliates are seeking or will seek investment
banking or other business from the company or companies that are the subject of this material and that the research professionals who were involved in preparing
this material may educate investors on investments in such business . The research professionals responsible for the preparation of this document may interact
with trading desk personnel, sales personnel and other parties for the purpose of gathering, applying and interpreting information. Our research professionals
are paid on the profitability of MOSt which may include earnings from investment banking and other business.
MOSt generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or
derivatives of any companies that the analysts cover. Additionally, MOSt generally prohibits its analysts and persons reporting to analysts from serving as an officer,
director, or advisory board member of any companies that the analysts cover. Our salespeople, traders, and other professionals or affiliates may provide oral or
written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading
and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein. In reviewing these materials, you
should be aware that any or all of the foregoing among other things, may give rise to real or potential conflicts of interest. MOSt and its affiliated company(ies),
their directors and employees and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and buy or sell the securities or
derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation
or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may
have any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no
bearing whatsoever on the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the
views of the affiliates of MOSt even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
Reports based on technical and derivative analysis center on studying charts company's price movement, outstanding positions and trading volume, as opposed
to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamental analysis. In addition MOST has different
business segments / Divisions with independent research separated by Chinese walls catering to different set of customers having various objectives, risk profiles,
investment horizon, etc, and therefore may at times have different contrary views on stocks sectors and markets.
Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information
specifically agrees to exempt MOSt or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSt
or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt or any of its affiliates or employees free and harmless from
all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The information contained herein
is based on publicly available data or other sources believed to be reliable. Any statements contained in this report attributed to a third party represent MOSt's
interpretation of the data, information and/or opinions provided by that third party either publicly or through a subscription service, and such use and
interpretation have not been reviewed by the third party. This Report is not intended to be a complete statement or summary of the securities, markets or
developments referred to in the document. While we would endeavor to update the information herein on reasonable basis, MOSt and/or its affiliates are under
no obligation to update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its affiliates from doing so.
MOSt or any of its affiliates or employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent
error in the information contained in this report. MOSt or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind,
regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-
infringement. The recipients of this report should rely on their own investigations.
This report is intended for distribution to institutional investors. Recipients who are not institutional investors should seek advice of their independent financial
advisor prior to taking any investment decision based on this report or for any necessary explanation of its contents.
Most and it's associates may have managed or co-managed public offering of securities, may have received compensation for investment banking or merchant
banking or brokerage services, may have received any compensation for products or services other than investment banking or merchant banking or brokerage
services from the subject company in the past 12 months.
Most and it's associates have not received any compensation or other benefits from the subject company or third party in connection with the research report.
Subject Company may have been a client of Most or its associates during twelve months preceding the date of distribution of the research report
MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise of over 1 % at the end of the month immediately preceding the
date of publication of the research in the securities mentioned in this report. To enhance transparency, MOSt has incorporated a Disclosure of Interest Statement
in this document. This should, however, not be treated as endorsement of the views expressed in the report.
Motilal Oswal Securities Limited is under the process of seeking registration under SEBI (Research Analyst) Regulations, 2014.
There are no material disciplinary action that been taken by any regulatory authority impacting equity research analysis activities
Motilal Oswal Securities Limited is registered as a Research Analyst under SEBI (Research Analyst) Regulations, 2014. SEBI Reg. No. INH000000412
A graph of daily closing g prices of securities is available at www.nseindia.com and http://economictimes.indiatimes.com/markets/stocks/stock-quotes.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the
compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s)
in this report. The research analysts, strategists, or research associates principally responsible for preparation of MOSt research receive compensation based upon
various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues
Disclosure of Interest Statement
1.Analyst ownership of the stocks mentioned above
2.Served as an officer, director or employee
Triveni Turbine
No
No
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such
distribution, publication, availability or use would be contrary to law, regulation or which would subject MOSt & its group companies to registration or
licensing requirements within such jurisdictions.
Motilal Oswal Securities Ltd
Motilal Oswal Tower, Level 6, Sayani Road, Prabhadevi, Mumbai 400 025
Phone: (91-22) 30894200 Fax: (91-22) 22885038. E-mail: info@motilaloswal.com