Triveni Turbine Ltd – Augmenting Sustainable Growth
Incorporated in 1995 and headquartered in Noida, Triveni Turbine Ltd. is one of the largest manufacturers of steam turbine products in India and globally. The company’s core competency is in the area of industrial heat & power solutions and decentralized steam-based renewable turbines up to 100 MW size. It serves several industries such as Sugar, Distillery, Steel, Cement, Pulp & Paper, Food Processing, Palm Oil, Chemicals, Petroleum Refineries etc. With manufacturing facilities in Bengaluru, the company has installed 6,000+ steam turbines over 20 industries across 80+ countries.
Products and Services
The products offered by the company includes – 1. Condensing Steam Turbines that find application in biomass, waste to energy, waste heat recovery, geothermal, etc. 2. Back Pressure Steam Turbines including American Petroleum Institute (API) compliant steam turbines catering to industry segments such as sugar & distillery, food processing, pulp & paper, textile, cement and steel, etc. 3. Aftermarket services to its own fleet of turbines as well as turbines and other rotating equipment such as compressors, rotors, etc. of other makers.
Subsidiaries: As of FY24, the company has 6 subsidiaries and 1 joint venture.
Investment Rationale
- Expanding order book – During FY25, the company recorded its highest-ever annual order booking of approximately Rs.2,300 crore, marking a 26% increase over FY24. This growth was driven by strong order finalizations across the renewable energy sector, industrial clients, power producers, and API customers, along with its entry into CO₂ energy storage solutions. Key orders were secured from regions including the Middle East, Europe, North America, Southeast Asia, and Africa, resulting in a 23% YoY increase in export bookings. Additionally, the international enquiry pipeline expanded by around 30%, while domestic enquiries surged by nearly 120%, offering robust visibility for future growth.
- New initiatives – The company is playing a pivotal role in advancing CO₂-based energy solutions through cutting-edge technologies that improve energy efficiency, lower greenhouse gas emissions, and support India’s move toward sustainable energy. It recently secured a Rs.290 crore order from NTPC for the installation of a 160 MWh CO₂-based Energy Storage System (ESS) at the NTPC’s Kudgi Super Thermal Power Plant in Karnataka, in partnership with its technology collaborator, Energy Dome. This innovative battery technology offers significant advantages, including a lifespan exceeding 25 years, no dependence on critical minerals like lithium or cobalt, and minimal performance degradation over time. Further expanding its sustainable product portfolio, the company has developed transcritical CO₂ heat pump and chiller systems, and is contributing to the global energy transition by developing both supercritical (sCO₂) and subcritical CO₂-based power blocks. A prototype has already been manufactured and assembled at the company’s facility, signaling the cusp of commercialization for this promising technology.
- Q4FY25 – During the quarter, the company generated revenue of Rs.538 crore, an increase of 17% compared to the Rs.458 crore of Q4FY24. Operating profit increased from Rs.107 crore of Q4FY24 to Rs.140 crore of Q4FY25, a growth of 31%. The company reported net profit of Rs.95 crore, an increase by 25% YoY compared to Rs.76 crore of the corresponding period of the previous year. Operating profit margin improved from 23% to 26% and net profit margin improved from 17% to 18% during the period.
- FY25 – During the FY, the company generated revenue of Rs.2,006 crore, an increase of 21% compared to the FY24 revenue. Operating profit is at Rs.518 crore, up by 36% YoY. The company reported net profit of Rs.359 crore, an increase of 33% YoY.
- Financial Performance – The 3-year revenue and net profit CAGR stands at 33% and 46% respectively between FY23-25. The company has a robust capital structure with a debt-to-equity ratio of 0.03. Average 3-year ROE and ROCE is around 28% and 37% for FY23-25 period.
Industry
The engineering and capital goods sector play a vital strategic role in India’s economy due to its strong links with the manufacturing and infrastructure industries. India holds a competitive edge in manufacturing costs, technological capabilities, market expertise, and innovation across multiple engineering sub-sectors. Engineering goods exports are projected to reach US$ 200 billion by 2030. Recognizing the critical role of reliable power supply in economic development, India is actively working to enhance its power infrastructure. Government-led initiatives aimed at expanding power generation capacity are expected to drive increased demand for electrical machinery. The Indian electrical equipment market is anticipated to grow from US$ 52.98 billion in 2022 to US$ 125 billion by 2027, reflecting a robust compound annual growth rate (CAGR) of 11.68%.
Growth Drivers
- The government has de-licensed the engineering sector with 100% FDI permitted.
- The ‘Make in India’ initiative, along with the government’s emphasis on improving the ease of doing business, is expected to create numerous opportunities in the engineering and capital goods sectors in the coming years.
- Growing population along with increasing electrification and per-capita usage.
Peer Analysis
Competitors: Elecon Engineering Company Ltd, CG Power & Industrial Solutions Ltd, etc.
Among the above competitors, the company stands out with steady revenue growth, superior return ratios, and strong earnings potential, reflecting the company’s financial stability and its ability to efficiently generate income and returns on invested capital.
Outlook
For FY26, the management has outlined a capital expenditure plan of approximately Rs.165 crore. The product portfolio is expected to grow substantially, supported by the company’s ongoing investments in research and development. As of March 31, 2024, the company had filed a total of 374 global Intellectual Property Rights (IPR), with a significant portion registered in India. Growth in aftermarket services and export sales is anticipated to contribute positively to margin improvement. Planned investments also include the expansion of international subsidiaries, further R&D and testing enhancements, and the addition of a new manufacturing bay at the Sompura facility. A strong closing order book provides solid medium-term visibility, positioning the company for sustained growth.
Valuation
We believe the company has robust growth potential given its focus on improving the product offerings and geographical expansion. We recommend a BUY rating in the stock with the target price (TP) of Rs.693, 47x FY27E EPS.
SWOT Analysis
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