Share price of this sugar company has jumped four-fold in one year

Shares of Triveni Engineering hit a new high of Rs 285.30, on rallying 9 per cent in intra-day trade. The stock zoomed 313 per cent from its 52-week low of Rs 69 touched on February 16, 2021.

Shares of Triveni Engineering & Industries hit a new high of Rs 285.30, on rallying 9 per cent on the BSE in Thursday’s intra-day trade after the company reported a robust results, wherein consolidated profit after tax (PAT) jumped 37 per cent year-on-year (YoY) to Rs 130 crore for the December quarter (Q3FY22).

Gross revenue from operations grew 10 per cent YoY at Rs 1,235 crore. Earnings before interest tax and depreciation and amortization (EBITDA) witnessed a growth of 26.4 per cent YoY at Rs 203 crore during the quarter led by firm sugar prices, higher ethanol volumes & higher proportion of B-Heavy ethanol. Margins improved 400 bps at 19 per cent from 15 per cent in a year ago quarter.

For the nine month period (April-December) of financial year 2021-22 (9MFY22), the company’s PAT rose 50 per cent to Rs 315 crore, despite flat revenue from operations at Rs 3,502 crore. Ebitda margins expanded 30 bps at 15 per cent for the period.
In the past one year, the stock of sugar company has zoomed nearly 300 per cent (four-fold jump), as compared to 18 per cent rally in the S&P BSE Sensex. The stock has rallied sharply from its 52-week low of Rs 69 touched on February 16, 2021.

The company is the second largest integrated sugar producer in the country; a market leader of engineered-to-order high speed gears & gearboxes and a leading player in water and wastewater management business.

The management said a broad-based economic recovery which is already underway is likely to keep the demand strong for engineering businesses. Power transmission business is poised for strong growth in the coming years across the gamut of services such as Defence, Gears and Built to print. The Company has a strong order pipeline in its Water business and continues to bid for many new projects to improve it further, the management said.

Triveni has been aggressively diverting sugarcane towards ethanol production in the current season. Moreover, with the commissioning of new distillery in March 2022 & brownfield capex in existing distillery by June 2022, the company would be able to scale up of its annual distillery capacity to 22 crore litres.  The brokerage firm ICICI Securities believes Triveni engineering would be beneficiary of higher sugar prices & increasing ethanol volumes going forward.