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Triveni Engineering & Industries Limited Q1 FY25 Conference Call Summary
Conference Call Overview • Date: August 2, 2024 • Moderated by: Rishab Barar (CDR India) • Key Executives Present: • Tarun Sawhney (Vice Chairman & Managing Director) • Suresh Taneja (Group CFO) • Sameer Sinha (CEO, Sugar Business Group) • Format: Opening remarks followed by Q&A • Transcript available on the company's website
Financial Highlights • Q1 FY25 Results: • Revenue: ₹1,301 crore (8.6% increase) • Profit Before Tax (PBT): ₹42 crore • Profit After Tax (PAT): ₹31 crore • Segment Performance: • Sugar: 12% revenue increase; profitability decreased due to lower production and higher expenses • Power Transmission: 1% revenue increase; record order book of ₹306 crore • Alcohol: 2% revenue decline due to lower sales volumes • Water: 21% revenue decline due to contract delays
Strategic Focus and Future Outlook • Sugar Production: • Focus on enhancing production and profitability, with a shift towards premium products • Anticipated double-digit increase in sugarcane availability contingent on weather • Ethanol Production: • Projected over 21 crore liters for FY25 and around 25 crore liters for FY26 • Power Transmission: • Positive outlook driven by international orders and government initiatives • Water Sector: • Optimism about upcoming project awards, including a significant project in Europe
Corporate Developments • Increased stake in Sir Shadi Lal Enterprises Limited (SSEL) to 61.77% • Strategic acquisition of Shamli for its agricultural ties and yield potential • Focus on cost-effective repair and maintenance programs
Q&A Highlights • Sugarcane Crushing Expectations: • Reduction of Co0238 variety and potential increase in availability • Distillery Segment: • Challenges with maize profitability; hope for improved margins with future policies • Power Transmission and Defence: • Gearbox facility expansion ahead of schedule; Defence facility delayed by a quarter • Water Sector: • Involvement in HAM projects; confidence in timely payments and future inquiries
Closing Remarks • Optimism about changes in sugar and ethanol markets, potential export opportunities, and improvements in pricing and feedstock conditions.
Conference Call Overview • Date: May 21, 2024 • Moderated by: Rishab Barar (CDR India) • Key Executives Present: • Tarun Sawhney (Vice Chairman & Managing Director) • Suresh Taneja (Group CFO) • Sameer Sinha (CEO, Sugar Business Group) • Structure: Opening remarks followed by Q&A • Transcript available on the company's website
Financial Performance Highlights • Q4 and FY 2024 Results: • Net Revenue: ₹ 5,220 crore • Profit Before Tax (PBT): ₹ 529 crore • Profit After Tax (PAT): ₹ 395 crore • Recommended Final Dividend: ₹ 1.25 per share (total dividends: ₹ 3.50)
Segment Performance • Sugar Segment: • 7% decline in turnover • 16% drop in sales volume due to reduced sugarcane crushing (8.26 million tonnes) • Alcohol Business: • Struggled with feedstock supply issues • 8.6% increase in net turnover but lower profitability • Power Transmission: • 30% increase in turnover • 40% rise in profits due to capital expenditure and international outreach
Debt and Credit Rating • Gross Debt: ₹ 1,325 crore (increased due to higher sugar inventories) • Credit Rating: AA+ (Stable) from ICRA
Future Outlook • Positive outlook for sugar and alcohol businesses despite challenges • Sugar production estimates align with forecasts; seeking government approval for sugar exports • Anticipated growth in all sectors, especially post-elections
Key Questions and Responses • Ethanol Volume Projections for FY 25: • Anticipated increase to 21-21.5 crore liters • Sugarcane Crushing Levels: • Seed replacement program in place to address Co238 variety issues • Feedstock Procurement: • Shift to maize due to unavailability of FCI rice • Sugar Exports: • Optimism for profitable exports despite global price declines • High-Speed Gears Business: • Over 90% market share in turbo gears; superior EBIT margins
Closing Remarks • Sawhney expressed optimism for future performance, emphasizing the potential of engineering businesses and favorable government policies, particularly in the ethanol sector.
Conference Call Overview • Date: February 6, 2024 • Focus: Analyst/Investor Conference Call held on January 31, 2024 • Key Executives: • Tarun Sawhney (Vice Chairman and Managing Director) • Suresh Taneja (Group CFO) • Sameer Sinha (CEO, Sugar Business Group) • Content: Discussion of Q3 and 9M FY 2024 financial results, forward-looking statements, Q&A session • Transcript available on the company's website
Financial Performance • Q3 & 9M FY 2024 Results: • Revenues: ₹3,918 crore • Profit Before Tax (PBT): ₹312.3 crore • Profit After Tax (PAT): ₹234.1 crore • Dividends: • Interim and special dividend declared: ₹2.25 per share • New Ventures: • Investment of ₹25 crore in manufacturing Indian Made Foreign Liquor (IMFL)
Business Segment Highlights • Sugar Segment: • Production increased by 11% • Profitability supported by higher sugar realizations • Power Transmission: • Capacity enhancement project expected to complete by December 2024 • Approved additional CAPEX of ₹180 crore • Alcohol and Water Businesses: • Challenges due to feedstock constraints and project execution delays • Revenue declines in Water business but maintained profitability
Market Outlook • Sugar Market: • Revised net sugar production: 31.7 million tonnes • Healthy closing stock projected: 8.8 million tonnes by September 2024 • Expected decline in overall sugar production (3-4%) but increase in Uttar Pradesh (12-14%) • Alcohol Business: • Profitability impacted by low-margin maize operations • Shift towards producing more sugar and C-heavy molasses • Power Transmission: • Strong outlook with growth in various industries, particularly defense
Future Strategies • Expansion Plans: • International expansion in Water business • Acquisition of a 25.43% stake in Sir Shadi Lal Enterprises for Sugar and Distillery operations • Capital Allocation: • Dynamic approach focused on growth areas • Emphasis on maximizing profitability through strategic investments
Q&A Highlights • Crushing and Production Forecasts: • Expected 6-7% increase in crushing and 10-11% rise in sugar production • Ethanol Production: • Profitability for B-heavy ethanol at ₹12-13 per litre • Anticipated increase in ethanol volumes • Cane Arrears and IMFL Investments: • Insights on marketing strategy and regional rollout plans
Conclusion • Overall strong performance in Sugar and Power Transmission sectors • Optimism for future growth in the Distillery sector and strategic investments in response to market conditions.
Conference Call Overview • Date: November 1, 2023 • Moderated by: Rishab Barar, CDR India • Key Executives: Tarun Sawhney (Vice Chairman & Managing Director), Suresh Taneja (Group CFO) • Format: Opening remarks followed by Q&A • Transcript available on the company's website
Financial Performance Highlights • Overall Performance: Satisfactory results for H1 FY 24 • Revenue: Increased by 1.4% to ₹2,606 crore • Profit Before Tax: Rose by 15% to ₹130.2 crore • Alcohol Business: • Sales volumes up 11.1% • Net turnover increased by 20.5% • Sugar Business: • Lower sales volumes due to government quotas • Blended sugar realizations up by 5.8% • Power Transmission: • Record revenue and profitability • 36.1% increase in order bookings • Net Debt: Reduced to ₹10 crore • Outlook: Optimistic due to favorable climatic conditions and operational efficiencies
Market Insights • Global Sugar Market: Projected deficit of over 2 million tonnes for 2023-24 • International Sugar Prices: At all-time highs due to El Nino concerns and reduced production in India • Alcohol Segment: Transitioned to maize as feedstock, resulting in a 12.8% increase in sales volume • Engineering Business: Significant turnover and profitability growth, especially in power transmission and defense • Water Business: Revenue declines due to project delays but secured new contracts
Strategic Focus • Foreign Projects: Securing funding through reputable agencies • Sugar Business: Strategic discussions with government for sugarcane supply • Ethanol Blending Program: Awaiting price announcements and increasing production capacity • Water Business: Expanding internationally and exploring domestic opportunities
Q&A Session Highlights • Sugarcane Crushing Estimates: Anticipated increase of 8% to 10% in sugar production • New Molasses Policy: Adjusted obligations for 'B' and 'C' heavy molasses • Maize as Feedstock: Positive experiences reported, sufficient supply for near term • PTB Division Expansion: On track for completion by April 2024 • Ethanol Blending Target: Up to 3.5 million liters, with challenges in meeting requirements • Pricing Insights: Discussion on maize pricing stability and impact of levy molasses on EBITDA
Closing Remarks • Positive Outlook: Confidence in performance across all business segments • Gratitude: Thanks to participants and wishes for a Happy Diwali
Introduction • Conference call held on July 26, 2023. • Key participants: • Mr. Tarun Sawhney (Vice Chairman and Managing Director) • Mr. Suresh Taneja (Group CFO) • Mr. Sameer Sinha (CEO Sugar Business Group) • Call included a disclaimer about forward-looking statements.
Company Performance Highlights • Strong performance despite a decline in the sugar sector. • Outperformed peers in Uttar Pradesh with minor decline in sugar recovery. • Achievements: • 5.6% increase in blended sugar realization. • Record alcohol production of 5.04 crore liters (up 19% YoY). • Engineering segment turnover increased by nearly 25%.
Financial Overview • Consolidated net turnover declined by 2.3% due to lower sugar sales. • Profit before tax rose by 2.6% to ₹91 crore. • Total debt increased; EPS rose by 12% to ₹3.09. • Strong sugar exports and higher pricing achieved.
Segment Performance
Alcohol Segment
• Record production; sales affected by logistical issues, now improved. • Ethanol constituted 91% of alcohol sales; on track to meet blending targets.
Power Transmission Business
• 110% increase in profitability; 77.8% rise in turnover. • Growth driven by strong export performance and improved margins.
Water Business
• Slight revenue decline due to project delays; focusing on international markets.
Strategic Initiatives • Enhancing sugar production capabilities and supporting government’s ethanol program. • Plans for significant capacity increase across various sectors, including Defence and Water.
Q&A Session Insights • Ethanol supply issues discussed; logistical challenges due to cyclone and refinery maintenance. • No government halt on broken rice for ethanol production; sufficient stocks available. • Capital employed in transmission and municipal businesses detailed. • Joint venture in chess (Triveni Sports Private Limited) explained; capital allocation of ₹2.5 crore.
Future Outlook • Investment in Defence facility confirmed at ₹40 crore; operational timeline of one year. • No immediate plans for capital allocation or demerger discussions. • Positive outlook for sugar business and pricing strategies for ethanol emphasized.
Closing Remarks • Sawhney expressed optimism for future developments in sugar pricing and global relationships in power transmission.
Call Overview • Date: May 26, 2023 • Participants: Senior management team introduced by Mr. Gavin Desa from CDR India. • Structure: Opening remarks followed by a Q&A session. • Availability: Transcript available on the company's website.
Company Performance Highlights • Record Achievements: • Sugarcane crush: 9.33 million tonnes (11% increase). • Turnover and alcohol production at record levels. • Financials: • Engineering segment revenues exceeded ₹500 crore. • Profit before interest and tax: ₹101 crore. • Significant debt reduction and completion of an ₹800 crore buyback scheme. • Recommended final dividend: ₹3.25 per share. • Future Plans: • Expansion of sugar capacity anticipated. • Expectation of improved sugar prices post-monsoon.
Sugar Market Insights • Domestic Supply: • Sufficient sugar to meet consumption and export demands. • Estimated opening balance of 5.5 million tonnes of sugar. • Global Market: • Decrease in global sugar surplus for 2022-2023. • Rising sugar prices, particularly in New York.
Alcohol and Engineering Segments • Alcohol Production: • Record production levels, with ethanol as the majority of sales. • Expanded distillation capacities contributing 21% to net turnover. • Engineering Growth: • 22% increase in turnover in the Power Transmission sector. • Focus on foreign projects in the Water business.
Strategic Initiatives • Sugarcane Yield Improvement: • Digital initiatives and pest surveillance planned. • Government Support: • Seeking increase in minimum selling price of sugar. • Ethanol Production: • Focus on grain-based ethanol production. • New distilleries expected to be commissioned.
Q&A Session Highlights • Sugarcane Crushing Figures: Confirmed at 95.5 lakh tonnes for FY 23. • Ethanol Production Strategies: Emphasis on grain sourcing and production targets. • Weather Risks: Acknowledgment of potential impacts from El Niño. • Inventory and Pricing Outlook: Sufficient sugar supply with anticipated price increases.
Future Outlook • Ethanol Production Targets: • Over 21 crore liters for FY 24 and 28 to 32 crore liters for FY 25. • Optimism for FY 24: Dependent on monsoon impact on sugarcane production.
Conference Call Overview • Date: February 1, 2023 • Key Executives: • Tarun Sawhney (Vice Chairman and Managing Director) • Suresh Taneja (Group CFO) • Sameer Sinha (CEO, Sugar Business Group) • Focus: Financial performance, future outlook, and forward-looking statements. • Transcript available on the company's website.
Financial Performance Highlights • Sugarcane Crushed: Increased by 25.3% YoY. • Sugar Exports: 135,000 tonnes. • Net Distillery Turnover: Increased by 61%. • Engineering Business Growth: • 29% increase in turnover for one segment. • 41% increase in turnover for another segment. • Capital Expenditure: • ₹90 crore for Sugar business. • ₹100 crore for Power Transmission.
Key Financial Metrics • Profit Before Tax: Increased by 7.4%. • Total Debt: Decreased to ₹389 crore. • Revenues: Grew by 34% to ₹1,659 crore. • EBITDA Margin: 16%. • Domestic Sugar Realizations: ₹3,611 per quintal.
Sugar and Ethanol Insights • Net Sugar Production: Expected at 35 million metric tonnes, lower than previous estimates. • Ethanol Sales: Declined from B-heavy molasses; 57% and 72% of sales volume for Q3 and 9M respectively. • Domestic Ethanol Blending Target: 12% with 470.5 crore litres finalized.
Engineering Segment Performance • Power Transmission Revenue: Increased by 71% to ₹60.5 crore. • Water Business Revenue: Increased by 34.4%, stable order book over ₹1,500 crore.
Future Outlook • Sugar Business: Anticipates 9-10% increase in sugarcane crush. • Alcohol Business: Plans to expand capacity; rising ethanol prices are encouraging. • Power Transmission Growth: Driven by industrial CapEx. • Defence Segment: Anticipates strong orders.
Q&A Session Highlights • Gross Recovery Decline: Reported as approximately 0.39 units, currently around 0.34-0.35 units. • Ethanol Pricing: Current price at ₹54 plus GST; concerns about government pricing affecting future investments. • Buyback Approvals: In progress, awaiting SEBI's final observation. • E20 Fuel Rollout: Pilot at select pumps; no issues expected for most vehicles.
Additional Insights • Ethanol Production Costs: Discussed by Suresh Taneja. • Sugar Production Strategy: Involves soil mapping, quality inputs, and farmer education. • Optimism for Q4: Anticipated improved sugar production and performance in engineering and distillery sectors.