Debt-Free Stock Okays Interim and Special Dividends For FY24: Buy?

The capital goods industry's mid-cap company Triveni Turbine Ltd has released its financial results for the quarter that ended on December 31, 2023. As per the data of Trendlyne, Triveni Turbine is a company with zero debt burden, but the more exciting news is that the firm has announced an interim dividend and a special dividend for FY24 for its eligible shareholders.

Triveni Turbine Dividend

The Board of Directors has "Declared an Interim Dividend of Rs.1.30/- per fully paid-up equity share of the face value of Re.1/- each and a Special Dividend of Re.1/- per fully paid-up equity share of the face value of Re. 1/- each for the financial year 2023-24, and fixed Friday, February 16, 2024 as the Record Date for purpose of ascertaining the entitlement of Members/Beneficial Owners to the said Interim and Special Dividends. The Interim and Special Dividends shall be paid (subject to deduction of tax at source) on or before February 29, 2024 to those equity shareholders of the Company whose names appear in the Register of Members of the Company or in the records of the Depositories as Beneficial Owners as on the Record Date," said Triveni Turbine in a stock exchange filing.

Triveni Turbine Financials

In the third quarter of the current financial year (Q3FY24), Triveni Turbine's net profit climbed by 29.7% year on year (YoY) to Rs 68.2 crore, up from Rs 52.6 crore during the same time the previous year. Its EBITDA for the December 2023 quarter was Rs 83.7 crore, which was 31.4% more than what it was for the same time in the previous fiscal year, which was Rs 63.7 crore. EBITDA margins in Q3 FY 24 climbed to 23.4% from 23% in Q3FY23, a rise of about 35 basis points. In comparison to the same quarter last year, when the company's sales were Rs 325.8 crore, it increased by 32.5% to Rs 431.7 crore in Q3FY24.

Mr. Dhruv M. Sawhney, Chairman and Managing Director, Triveni Turbine Limited, said "Triveni Turbines continues on a robust growth path as demonstrated in stellar results during the nine-month period ending December 31, 2023. New benchmarks have been surpassed in key metrics of revenues, profitability and order booking. Revenues in 9M FY 24 grew 36% over the previous year to reach record level of Rs 11.96 billion. Profit Before Tax (PBT) grew faster at 41% y-o-y and stood at Rs 2.57 billion with higher than expected margins of 21.5%. Earnings per share grew an impressive 43% to Rs 6.08 at the nine-month mark. Order booking during 9M FY 24 grew 27% to Rs 14.43 billion, with export contribution increasing to 53% as against 42% in the previous corresponding period. Robust growth in order booking along with an improved export contribution provides good visibility for both revenues and profitability for the next year."

"With customer-centricity at the core of everything that we do, it has been our endeavour in recent years to expand not only our geographical presence but widen our offerings both in terms of product and aftermarket solutions. We also continue to strategically allocate investments for sustained growth and maintaining a competitive edge. The results of these efforts are well demonstrated in our performance with exports at 46% of sales in 9M FY 24 (vs. 42% in 9M FY 23) and aftermarket as % of sales at 33% in 9M FY 24 (vs. 30% in 9M FY 23)," he added.

"In the last 12-18 months, we have witnessed growth in both turnover and profitability in foreign subsidiaries. The Company has also benefited in the form of increased brand awareness, enhanced reputation, international references, to name a few. Gaining confidence from our experience in the African market, we have made further strides in the quarter gone by in pursuit of enhancing the customer value proposition globally through greater local presence. To further our ambitions in the North American market, we commenced the process of investing for a local facility under a wholly owned Subsidiary in the United States (US). We believe this market stands as an attractive opportunity driven by demand for reliable energy solutions, shift towards cleaner energy alternative, coupled with Government initiatives and incentives which make it a compelling space for strategic investments," he stated.

"During Q3 FY 24, we continued to witness healthy demand for products both in domestic and international markets. As a result, order booking for product segment in Q3 FY 24 increased by 23% y-o-y to Rs 3.77 billion. At the nine-month mark, product order booking stands to Rs 9.90 billion, up 19% y-o-y driven by exports especially in the API segment coupled with robust domestic demand. With a 14% increase in overall enquiry book, we remain constructive on future orders for this segment in the medium-term," Mr. Dhruv M. Sawhney said.

"Our aftermarket business continues to go from strength to strength with commendable performance across its sub-segments of spares, services and refurbishing. Under refurbishing we continue to execute orders and generate enquiries across a wider range of rotating equipment beyond industrial steam turbines. The business performance was healthy in Q3 FY 24 and 9M FY 24 with order booking in this segment increasing 34% y-o-y to Rs 1.54 billion and 49% y-o-y to Rs 4.53 billion. Growth was driven by international orders though domestic demand is also healthy with focus on efficiency upgrade and automation," the chairman and managing director further added.

"We remain confident that TTL's robust foundation, operational efficiencies, research and development proficiency, strong manufacturing capabilities and established partnerships position us for significant strides in the Company's growth and enhanced value creation for our stakeholders. While we remain vigilant about external developments, we are assured of our capacity to adeptly navigate challenges, as demonstrated in recent years," he commented.

Triveni Turbine Share Price Target

Triveni Turbine is bullish but also overbought on the Daily charts with next resistance at 543. Investors should book profits at current levels as a Daily close below support of 435 could lead to a target of 350 in the near term, said AR Ramachandran from Tips2trades.