Growth Strategy, Future Outlook, Challenges, and Key Advancements of Triveni Engineering & Industries Ltd. || from Management’s conference call
Growth Strategy
Expansion in Power Transmission Business: The company is increasing its gears capacity to ₹700 crore by September 2026 to support growing demand.
Increased Sugar Production: Despite initial lower recovery trends, Triveni anticipates a 15% increase in cane crush this year.
Diversification in Ethanol Production: The company has participated in FCI rice tenders and continues to optimize its ethanol production mix to enhance profitability.
Strong Order Book in Engineering Segments: The Power Transmission and Water businesses have recorded significant order growth, with an all-time high combined order book of ₹2,356 crore.
Value Unlocking Strategy: The company is executing a Composite Scheme of Arrangement, including the merger of Sir Shadi Lal Enterprises (SSEL) and the demerger of its Power Transmission Business into Triveni Power Transmission Ltd.
Future Outlook
Sugar Business: Expected stabilization of sugar prices due to government measures, including sugar exports and improved domestic demand.
Ethanol Production: Higher ethanol blending targets (20%) and policy changes could improve margins and drive growth.
Power Transmission Growth: Expanding international reach and gaining new qualifications for large-scale export orders in the Oil & Gas and Defence sectors.
Water Business Expansion: The company is eyeing new opportunities in wastewater recycling, zero liquid discharge, and international tenders funded by multilateral agencies.
Challenges
Regulatory Uncertainty: Government decisions on ethanol pricing, sugar MSP, and SAP could impact profitability.
Sugar Recovery Issues: The degeneration of the 0238 sugarcane variety has led to lower recoveries, but efforts are being made to diversify crop varieties.
Volatility in Raw Material Costs: The availability and pricing of feedstocks (molasses, maize, and rice) impact ethanol margins.
Execution Delays in Water Business: Some international projects (e.g., in Bangladesh) have faced slow execution due to external conditions.
Key Advancements
Increased Sugar Export Allocation: The company has secured an export allocation of ~32,000 tonnes, supporting better sugar price realizations.
Technological Advancements in Power Transmission: Triveni has received a major order for 42 propulsion gearboxes for Defence, showcasing its indigenous technology capabilities.
Ethanol Policy Support: Recent policy changes, such as the rise in ethanol procurement price from C-heavy molasses, are expected to support profitability.
Defence Sector Growth: The upcoming dedicated Defence facility is expected to expand Triveni’s capabilities in indigenous manufacturing for marine and military applications.
