Triveni Turbine drops after poor Q2 numbers

Triveni Turbine tumbled 5.74% to Rs 51.70 at 11:51 IST on BSE after net profit fell 45.55% to Rs 15.30 crore on 31.6% decline in net sales to Rs 122.90 crore in Q2 September 2013 over Q2 September 2012.

The Q2 result was announced after market hours on Wednesday, 6 November 2013.

Meanwhile, the S&P BSE Sensex was up 197.10 points or 0.94% at 21,092.04.

On BSE, 2,446 shares were traded in the counter as against average daily volume of 47,012 shares in the past one quarter.

The stock hit a high of Rs 53.60 and a low of Rs 51.05 so far during the day. The stock had hit a 52-week low of Rs 45 on 1 August 2013. The stock had hit a record high of Rs 64 on 23 July 2013.

The stock had outperformed the market over the past one month till 6 November 2013, surging 9.7% as compared to the Sensex's 4.92% rise. The scrip had also outperformed the market in the past one quarter, jumping 12.98% as compared to the Sensex's 11.54% rise.

The small-cap company has equity capital of Rs 32.99 crore. Face value per share is Re 1.

Triveni Turbine's EBITDA (earnings before interest, taxation, depreciation and amortization) declined 42.95% to Rs 25.90 crore in Q2 September 2013 over Q2 September 2012. EBITDA margin declined to 21.1% from 25.3% a year ago.

Commenting on the company's Q2 performance, Mr. Dhruv M. Sawhney, CMD, Triveni Turbine said, "The performance of the business for the quarter and half year under review has been lower than our expectations. The macroeconomic factors - economic slowdown, currency depreciation, lower credit etc., both domestically and in the addressable markets globally, impacted both the order booking and revenue. The enquiry book for both domestic and overseas market remain strong, but the challenge being faced is the delay in order finalisation as well as delay in taking deliveries, which are primarily from the customer end. The company continued its focus on export markets and during the last six months, established customer contacts in over 15 new countries and is expecting generation of enquiries/orders from these markets as well in the coming quarters. The aftermarket business is going as per our estimates and we believe we will be able to achieve a year on year growth in that segment during the year. We believe, in the second half of the current financial year, on account of improvement in credit off-take especially from the industrial segments which we cater to, the order booking should improve in both domestic & exports which should help in building a healthy order book for FY 2015. However, on account of slow down in the order intake and delay in despatches in the first half of the current financial year, we believe the year end results would not be as per our earlier estimates, and is expected to register a decline. Even though this will also have an impact on the overall profitability due to under-absorption of fixed overheads, the contribution margins remain healthy in line with previous years. However, we believe this to be in the short term and once the order booking picks up, we expect the business to be back on the growth path with similar profitability as was shown in the previous years".

Mr. Sawhney added, "GE Triveni, the joint venture with GE, has secured two orders in the current half year and is expected to have break-through in the international market. Having successfully commissioned its first turbine and having four turbines in the pipeline for execution, we believe that GETL is well positioned to get more orders - both from domestic and international markets".

Triveni Turbine's core competency is in the area of steam turbines manufacturing upto 30 MW size.

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