Triveni Turbine Ltd: Fundamental Analysis

In this article, we’re going to explore Triveni Turbine Ltd. fundamentally, understand its business model and industry, and find out whether it’s a good investment fit for you.

Triveni Turbine Ltd.

Triveni Turbine Ltd is primarily engaged in the manufacture of equipment used in generating power supply, and other power-related solutions. Triveni Turbine was a division of the larger Triveni Engineering & Industries Ltd from the 1970s until 2010, which was when it became a separate entity.

Currently, the company boasts a diverse range of turbines under different varieties. Most of these turbines range from 1 to 100 MW in capacity. These turbines are supplied to a wide range of industries, including sugar, cement, chemicals, palm oil, biomass power, waste-to-energy, oil & gas, food, and even defence. 

The company is considered the market leader in India for turbines up to 30 MW in capacity with up to 60% of the country’s market share in this segment. It is also the largest manufacturer of industrial steam turbines globally in the 5-30 MW range. 

According to the company’s leadership, Triveni’s turbines are widely used in several industries because the company has historically worked to provide low-cost energy generation solutions that are also environmentally-friendly and largely sustainable.

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Is energy equipment a good industry to invest in?

India is the largest energy consumer in the world currently and it accounts for almost 5.5% of the world’s primary energy consumption. It is also the 3rd largest country by power generation after the US and China, and one of the leading consumers of coal. Since the country is working hard to surpass COP21 commitments through the adoption of cleaner energy, environmentally-friendly solutions to power generation are attracting more and more investment and interest.

Steam turbines, which are one of the most popular equipment that Triveni manufactures, have several ecological advantages to other turbines. For instance, they are scalable, which means that these turbines don’t need to be customised to every industry’s needs, thus reducing waste in the long term.

They’re also very efficient since the properties of steam at high pressures and temperatures are constant around the globe and are largely predictable. This allows for industries to achieve relatively high accuracy about the capacity of power generation, which again reduces waste and lowers cost.

Today, the Indian electrical equipment market is estimated to grow to more than $53 billion from 2022 to 2027 owing to rapid urbanisation and an ever-increasing demand for energy. The CAGR is estimated to be more than 11.7%.

Who are TRITURBINE’s competitors in the energy sector?

Here are some TRITURBINE’s competitors:

• Siemens
• ABB
• CG Power & Indu.
• Suzlon Energy
• BHEL
• Apar Inds.
• Hitachi Energy

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History of Triveni Turbine Ltd.

The parent company, Triveni Engineering & Industries Limited (TEIL), is an Indian conglomerate with a very diversified portfolio of businesses, one of which is Triveni Turbine.

TEIL was founded on 27 July 1932, under the Companies Act 2013, as The Ganga Sugar Corporation Limited. In 2010, Triveni Turbine, which was a division of the larger group, became a separate entity. Before that, the division had already begun production of steam turbines and delivered their first one in 1968. Over the years, the company started manufacturing bigger and better turbines, starting from 10 MW in 2003 and ending up at 35 MW by 2011.

Along the way, the company has participated in several joint ventures with different companies, including GE Oil & Gas, GETL, and GEC Alstom.

Investing in TRITURBINE

Pros

• More than 6000 steam turbine units installed around the world till date, serving 20+ industries and 75+ countries.
  
• The company has filed for protection of IP rights for more than 130 pioneering products and solutions that they developed in-house. These include more than 60 patent filings also.
  
• Company is almost debt-free.
  
• Net profit and EPS numbers have been rising every quarter for the last two years.

Cons

• The share price seems to be overvalued, since it is currently trading at more than 14 times its book value.
  
• Promoter holding in the company has decreased by more than 19% in the last 3 years.
  
• Low dividend yield

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The finances

Shareholding pattern of Triveni Turbine Ltd.

Here’s the shareholding pattern of TRITURBINE:

• Promoters: 55.84%
• Foreign Institutional Investors (FIIs): 27.68%
• Domestic Institutional Investors (DIIs): 11.66%
• Public: 4.82%

Conclusion

So, that’s a brief overview of everything you need to know about Triveni Turbine Ltd. before you decide to invest. This information is by no means, however, exhaustive and we encourage you to do your own research before investing.

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