Release Date: May 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Triveni Engineering & Industries Ltd (BOM:532356, Financial) reported record revenues of INR 1,925 crores for Q4 FY25, marking a significant achievement for the company.
- The Power Transmission business delivered a stellar performance with increased revenues, profitability, and order bookings, showcasing strong growth potential.
- The company successfully commissioned a new multi-feed distillery at Rani Nangal, contributing to a 15.7% increase in the Alcohol business turnover.
- The Water business saw strong order bookings of INR 586 crores, with a closing order book of over INR 1,600 crores, indicating robust future prospects.
- The Board of Directors recommended a final dividend of 250% for FY25, reflecting confidence in the company's financial health and shareholder returns.
Negative Points
- The Sugar business faced challenges with a 12.8% decline in segment profits due to higher costs of sugar sold and lower recovery rates.
- The Alcohol business profitability was adversely affected by higher sales volume of ethanol produced from maize, which had lower margins compared to other sources.
- The Water business experienced a decline in revenues due to slow execution of certain projects, impacting overall performance.
- The gross debt position increased to INR 1,969 crores on a consolidated basis, indicating a rise in financial liabilities.
- International sugar prices have touched multi-quarter lows, posing a challenge for the company's export strategy and profitability.
Q & A Highlights
Q: Can you provide an outlook for the distillery business, considering the current trends in molasses and maize prices?
A: Tarun Sawhney, Executive Vice Chairman and Managing Director, explained that the future of the distillery business is being contemplated by the government, with NITI Aayog considering options beyond E20 blending. The current margin erosion is due to stable ethanol prices over two years and increased raw material costs. Maize prices have fallen recently, which is beneficial, but significant yield improvements are needed for further price reductions.
Q: How do you see the profitability of the Water business given the growth in order book and sales?
A: Tarun Sawhney stated that the profitability of the Water business is expected to remain stable. The company has participated in numerous bids and expects to secure reasonable orders during the year, despite some favorable impacts from cost savings in certain projects.
Q: What is the current status of the varietal change in sugarcane, and how does it affect recovery rates?
A: Tarun Sawhney noted that while Co-0238 was a highly successful variety, new varieties are being developed. The company is reducing the proportion of Co-0238, especially in low-lying areas, and focusing on pest and disease management to improve recovery rates. The goal is to lower Co-0238 usage to below 40% this season.
Q: What are the expectations for sugar prices in FY26, considering the current market conditions?
A: Tarun Sawhney expects sugar prices to remain range-bound but slightly higher than current levels due to a favorable balance sheet. Any negative news could spur higher prices. The average realization is anticipated to be fractionally higher than the current INR40.5 per kilo.
Q: Can you provide more details on the Power Transmission business, especially with its upcoming demerger?
A: Tarun Sawhney acknowledged the need for more detailed information on the Power Transmission business as it prepares for demerger. The company plans to provide more insights into customer targeting and industry mix in future communications.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
