Triveni Turbine Ltd:Annual Report 2023-24 Analysis

Triveni Turbine Ltd.: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History #

Triveni Turbine Ltd. (TTL) was established in 1995 as a subsidiary of Triveni Engineering & Industries Ltd. The company was demerged and listed separately in 2011.

Headquarters Location and Global Presence #

TTL’s headquarters are located in Noida, Uttar Pradesh, India. The company has a global presence, exporting to over 75 countries across various regions, including Asia, Africa, Europe, and the Americas. They have offices and service centers in several locations worldwide.

Company Vision and Mission #

While specific details may vary, TTL’s vision is generally focused on being a leading global provider of reliable and efficient steam turbine solutions, contributing to sustainable energy generation. Their mission typically revolves around delivering high-quality products, innovative solutions, and exceptional customer service.

Key Milestones in Their Growth Journey #

• 1995: Inception as a subsidiary of Triveni Engineering & Industries Ltd.
• 2011: Demerged and listed separately on stock exchanges.
• Expansion into new markets and product segments.
• Strategic partnerships and collaborations.
• Significant growth in international exports.

Stock Exchange Listing Details and Market Capitalization #

Triveni Turbine Ltd. is listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). You’ll need to check current financial websites for up-to-date market capitalization figures, which are subject to change.

Recent Financial Performance Highlights #

• Consistent revenue growth over the past several years.
• Strong profitability margins compared to industry averages.
• Healthy order book and pipeline indicating future growth.
• Focus on cost optimization and operational efficiency.

Management Team and Leadership Structure #

The company has a well-defined organizational structure with a Board of Directors overseeing the management team. Key leadership positions include:

• Chairman & Managing Director: (Check official website for current incumbent)
• Chief Financial Officer (CFO): (Check official website for current incumbent)
• Executive Directors: (Check official website for current incumbents)

Any Notable Awards or Recognitions #

Triveni Turbine Ltd. has received awards and recognition for its performance, innovation, and export excellence. You’ll need to verify recent awards with the company’s official website or annual report.

Their Products #

Complete Product Portfolio with Categories #

TTL’s primary product is steam turbines. These turbines are categorized based on capacity, application, and design. Key categories include:

• Back Pressure Turbines: Used for combined heat and power (CHP) applications.
• Condensing Turbines: Used for power generation.
• Extraction Cum Condensing Turbines: Allow for the extraction of steam at intermediate pressures for process heating or other applications.
• Single Stage Turbines: Simpler design suitable for smaller power generation needs.
• Geared Turbines: Improves efficiency and reliability of small turbines, especially where driven equipment runs at much lower speeds.

Flagship or Signature Product Lines #

While all their turbine offerings are crucial, their back-pressure and extraction cum condensing turbines, particularly those for industrial CHP applications, are often considered flagship products due to their widespread adoption and efficiency benefits.

Key Technological Innovations or Patents #

• Advanced blade designs for improved efficiency.
• Digital control systems for enhanced performance and monitoring.
• Use of high-strength materials for reliability and durability.
• Designs optimized for various fuel sources (biomass, coal, gas).

Manufacturing Facilities and Production Capacity #

TTL has state-of-the-art manufacturing facilities in India, equipped with advanced machinery and testing equipment. Specific production capacity figures are proprietary but are designed to meet growing global demand.

Quality Certifications and Standards #

TTL adheres to international quality standards. You’ll need to verify the recent certifications with the company’s official website or annual report, but they generally include:

• ISO 9001: Quality Management System
• ISO 14001: Environmental Management System
• OHSAS 18001 / ISO 45001: Occupational Health and Safety Management System

Any Unique Selling Propositions or Technological Advantages #

• Customized Solutions: TTL designs turbines to meet specific client requirements.
• High Efficiency: TTL turbines are known for their high efficiency and reliable performance.
• Compact Design: Their turbines often feature compact designs, making them suitable for various installation environments.
• Strong Service Network: They have a global service network for installation, commissioning, and maintenance.

Recent Product Launches or R&D Initiatives #

• Development of higher-capacity turbines for large-scale power generation.
• Focus on turbines compatible with renewable energy sources (biomass).
• Development of digital solutions for remote monitoring and diagnostics.

Primary Customers #

Target Industries and Sectors #

TTL’s primary customers are in industries requiring power generation or combined heat and power (CHP). These include:

• Sugar
• Pulp & Paper
• Textiles
• Chemicals
• Cement
• Palm Oil
• Steel
• Waste to Energy
• Independent Power Producers (IPPs)

Geographic Markets (Domestic vs. International) #

TTL serves both domestic and international markets. International sales constitute a significant portion of their revenue.

Major Client Segments (Agricultural, Industrial, Residential, etc.) #

The focus is primarily on industrial clients needing captive power generation. There is a growing segment related to Waste to Energy in many regions.

Distribution Network and Sales Channels #

TTL utilizes a combination of direct sales, regional offices, and channel partners to reach customers globally. They also participate in industry trade shows and conferences.

Major Competitors #

Direct Competitors in India and Globally #

• India: Bharat Heavy Electricals Limited (BHEL), Siemens India
• Globally: Siemens, MAN Energy Solutions, General Electric, Ansaldo Energia

Competitive Advantages and Disadvantages #

• Advantages: Strong focus on smaller capacity turbines, customized solutions, strong aftermarket service, lower cost base (compared to some global players).
• Disadvantages: Smaller scale compared to global giants, potential limitations in offering very large capacity turbines.

How They Differentiate From Competitors #

TTL differentiates itself through its focus on smaller capacity turbines, customized solutions, and strong customer support.

Industry Challenges and Opportunities #

• Challenges: Fluctuations in raw material prices, increasing competition, evolving emission standards.
• Opportunities: Growing demand for distributed power generation, increasing adoption of renewable energy sources, rising industrialization in developing countries.

Market Positioning Strategy #

TTL positions itself as a reliable and efficient provider of steam turbine solutions for industrial CHP and power generation applications, focusing on customized solutions and strong customer support.

Future Outlook #

Expansion Plans or Growth Strategy #

• Expanding into new geographic markets.
• Increasing focus on higher-capacity turbines.
• Strengthening its service network.
• Strategic alliances and acquisitions.

Upcoming Products or Innovations #

• Development of turbines with improved efficiency and reduced emissions.
• Integration of digital technologies for enhanced performance and monitoring.
• Expanding the product portfolio to include complementary products and services.

Sustainability Initiatives or ESG Commitments #

TTL is increasingly focused on sustainability. While specific initiatives need verification, look for:

• Developing turbines compatible with renewable energy sources.
• Reducing the environmental impact of its manufacturing operations.
• Promoting energy efficiency and sustainable practices.

Industry Trends Affecting Their Business #

• Increasing adoption of renewable energy.
• Growing demand for distributed power generation.
• Stringent environmental regulations.
• Rising energy costs.

Long-Term Vision and Strategic Goals #

TTL’s long-term vision is to be a leading global provider of steam turbine solutions, recognized for its innovation, quality, and customer service. Strategic goals likely include:

• Achieving sustainable revenue growth.
• Expanding its market share.
• Enhancing its brand reputation.
• Improving profitability.

Triveni Turbine Limited (FY24) Performance Overview #

Financial Performance (3-Year Trend Analysis) #

Triveni Turbine Limited (TTL) reported record performance for the third consecutive year in FY24. Consolidated revenue from operations grew 32.6% YoY to ₹16,539 million. EBITDA increased 37.9% YoY to ₹3,810 million, with margins expanding 80 bps to 23.0%, primarily driven by higher international sales and operational efficiencies. Consolidated Profit After Tax (PAT) rose 39.7% YoY to ₹2,695 million, with PAT margin improving 80 bps to 16.3%. Order booking reached a record ₹18.78 billion, a 17% YoY increase, driven significantly by export orders which grew 51% YoY to ₹10.19 billion (54% of total booking vs 42% in FY23).

Return on Equity (ROE) improved significantly to 31.3% (vs. 23.8% in FY23), and Return on Capital Employed (ROCE) reached 41.5% (vs. 31.5% in FY23). The company maintains a strong balance sheet, characterized by negative working capital (-₹1,951 million as of Mar 2024), substantial cash reserves (₹8,831 million including investments), and an increasing asset turnover ratio (5.82x in FY24 vs 3.22x in FY20). Dividend payout for FY24 stood at ₹1,144 million (including interim, special, and proposed final dividend), representing 43% of consolidated PAT. The company outperformed the global <100 MW steam turbine market (ex-China, ex-Japan), which grew by 3% in 2023, highlighting market share gains.

Business Segment Performance #

• Products: Product segment order booking grew 10% YoY to a record ₹12.61 billion, contributing 67% of total bookings. Revenue from products increased 33.5% YoY to ₹11,158 million (67.5% of total revenue). Growth was driven by orders for renewable applications (Biomass, WtE, WHR, Geothermal), industrial power generation, and API turbines, particularly in international markets. Domestic product order booking saw a decline due to delays in finalization.
• Aftermarket: The Aftermarket segment achieved significant growth, with order booking surging 34% YoY to ₹6.17 billion (33% of total) and revenue growing 31% YoY to ₹5,381 million (32.5% of total). This growth was fueled by refurbishment services (Triveni REFURB) for both TTL and third-party rotating equipment, spares, and maintenance contracts, increasingly targeting complex upgrades and efficiency enhancements.

Geography #

Exports were a major growth driver, with export revenue increasing 37.7% YoY to ₹7,676 million (46.4% of total) and export order booking increasing 51% YoY to ₹10.19 billion (54% of total). Domestic revenue grew 28.4% YoY to ₹8,863 million (53.6% of total), while domestic order booking declined 8% YoY to ₹8.59 billion (46% of total).

Strategic Initiatives and Progress #

• Global Expansion: TTL expanded its presence to over 80 countries. A key initiative was establishing a subsidiary (Triveni Turbines Americas Inc.) in Texas, USA, to target the large North American market for both products and aftermarket services. Strengthening presence in Europe, West Asia, Southeast Asia, and Africa continued.
• Innovation & R&D: Focus remained on enhancing turbine efficiency and developing solutions for energy transition. Progress includes development of supercritical CO2 (sCO2) turbines, thermal battery solutions using CO2, and transcritical CO2 (tCO2) cooling/heating systems. Investment in R&D was 1.41% of standalone turnover (₹194.16 million). 374 IPR filings were achieved by March 31, 2024. Development of API-compliant turbines for the Oil & Gas sector yielded significant orders.
• Aftermarket Development: Strategic focus on growing the refurbishment business (Triveni REFURB) for multi-brand rotating equipment, enhancing capabilities in reverse engineering, efficiency upgrades, and life extension services.
• Operational & Digital Excellence: Continued asset-light model by subcontracting non-critical assemblies. Strengthened vendor network globally. Upgraded ERP system to SAP S/4HANA private cloud and implemented HCMS for HR digitization. Commenced development of an integrated platform for knowledge management, field service, and customer support.
• Capacity & Capability: Augmented manufacturing capabilities for critical components and API-compliant turbines. Expanded vendor and subcontractor base. Increased employee headcount significantly (over 30% in last two years) to support growth, with ongoing focus on talent acquisition and competency development.

Risk Landscape Changes #

The primary risks identified include geopolitical conflicts impacting market access and trade routes (Ukraine, Middle East, Red Sea crisis), supply chain capacity ramp-up challenges, increasing complexity of compliance with international expansion (especially US), and the need for continuous product innovation to meet market demands (energy efficiency, renewables, API). Cybersecurity remains a key focus area. Mitigation strategies involve geographical diversification of orders, proactive supply chain management (capacity building, vendor addition), robust compliance frameworks supported by local presence and advisors, sustained R&D investment, and continuous enhancement of cybersecurity architecture. The Enterprise Risk Management (ERM) framework is actively used, integrated into performance evaluation, with oversight from the Risk Management Committee and the Board.

ESG Initiatives and Metrics #

• Environmental: Focused on energy conservation (consumption per turnover reduced by 12%), renewable energy generation (1.3 MW rooftop solar installed, generating 1489 MWh in FY24), water conservation (ZLD plants), waste management (steel scrap recycling), and emissions reduction (SOx/NOx reduced >20%, Scope 1&2 GHG intensity reduced 8%). Manufacturing facilities maintain ISO 14001. Promotes sustainable sourcing from vendors (44% of material). Products contribute to sustainability via renewable energy applications (WtE, WHR, Biomass).
• Social: Ensured employee health & safety (ISO 45001 certified plants, OHS training, health checks). Invested in employee learning & development (training man-days increased >120%). Implemented CSR initiatives focusing on healthcare, education (especially for differently-abled children and technical education), spending ₹31.37 million. Maintained policies on Equal Opportunity, Anti-Sexual Harassment (zero complaints reported in FY24), and Human Rights.
• Governance: Maintained a governance structure with 50% Board independence, distinct roles for Chairman and CEO function (though held by same individual), active Board committees (Audit, NRC, SRC, RMC, CSR), Whistle Blower policy, and strong code of conduct adherence.

Management Outlook #

Management expresses strong optimism for FY25 and the medium term, underpinned by a robust closing order book of ₹15.5 billion (Consolidated) comprising renewable, API, and industrial power generation turbines. A strong enquiry pipeline exists globally.

Detailed Analysis #

Financial Analysis: Triveni Turbine Limited (FY 2023-24) #

Comparative Financial Position (Assets, Liabilities, Equity) #

Consolidated Basis (INR Million)

Triveni Turbine Limited (FY 2023-24) Financial Analysis #

Revenue Analysis #

• Overall Growth: Consolidated revenue from operations grew 32.6% year-over-year (YoY) to INR 16,539 million in FY24 from INR 12,476 million in FY23. Standalone revenue grew 27.3% YoY to INR 13,785.7 million from INR 10,832.5 million.
• Segment Breakdown (Consolidated FY24):
  • Product Sales: INR 11,158.4 million (67.5% of total), representing 33.5% YoY growth.
  • Aftermarket Sales: INR 5,381.0 million (32.5% of total), representing 30.7% YoY growth.
• Geographic Breakdown (Consolidated FY24):
  • Exports: INR 7,676.0 million (46.4% of total), representing 37.7% YoY growth.
  • Domestic: INR 8,863.4 million (53.6% of total), representing 28.4% YoY growth.
• Order Booking (Consolidated FY24): Total order booking grew 17% YoY to INR 18.78 billion. Export order booking grew 51% to INR 10.19 billion (54% of total), while domestic order booking declined 8% to INR 8.59 billion. Product order booking increased 10% to INR 12.61 billion, and Aftermarket order booking increased 34% to INR 6.17 billion.

Cost Structure Analysis #

• Cost of Goods Sold (COGS): Consolidated COGS as a percentage of sales decreased marginally to 58.3% in FY24 from 58.8% in FY23, attributed to value engineering and supply chain initiatives offsetting input cost pressures.
• Employee Benefits Expense: Consolidated employee cost increased by 25.5% YoY, driven by annual increments and increased headcount for growth initiatives. However, employee costs as a percent of sales declined from 12.4% in FY20 to 9.8% in FY24. Standalone employee cost was INR 1,341.6 million (FY24) vs INR 1,069.5 million (FY23).
• Other Expenses: Consolidated other expenses (excluding subcontracting) increased by 38.3% YoY, linked to higher operational levels, increased travel, and higher selling expenses corresponding to export growth. Standalone other expenses were INR 1,955.9 million (FY24) vs INR 1,410.4 million (FY23).
• Finance Costs: Remained low, indicating minimal reliance on debt. Consolidated finance costs were INR 12.3 million (FY24) vs INR 9.8 million (FY23). Standalone finance costs were INR 9.6 million (FY24) vs INR 6.7 million (FY23).
• Depreciation & Amortisation: Consolidated expense was INR 291.1 million (FY24) vs INR 238.4 million (FY23). Standalone expense was INR 249.5 million (FY24) vs INR 204.0 million (FY23).

Margin Analysis #

• Gross Margin (Calculated): Consolidated Gross Margin improved slightly to 41.7% in FY24 from 41.2% in FY23.
• EBITDA Margin: Consolidated EBITDA margin improved by 80 bps to 23.0% in FY24 from 22.2% in FY23, primarily due to higher international sales. Standalone EBITDA margin improved significantly by 235 bps to 22.21% in FY24 from 19.86% in FY23.
• PBT Margin: Consolidated PBT margin improved to 21.6% in FY24 from 20.5% in FY23. Standalone PBT margin improved to 20.58% in FY24 from 18.04% in FY23.
• PAT Margin: Consolidated PAT margin improved by 80 bps to 16.3% in FY24 from 15.5% in FY23. Standalone PAT margin improved by 179 bps to 15.16% in FY24 from 13.37% in FY23.

Operating Leverage #

• Both Consolidated (37.9%) and Standalone (42.3%) EBITDA growth significantly outpaced their respective revenue growth rates (32.6% and 27.3%). This indicates positive operating leverage during FY24.

Non-Recurring Items #

• No exceptional or non-recurring items affecting profit/loss in FY24 and FY23 (Standalone and Consolidated).
• A Special Dividend of INR 1.00 per equity share was declared and paid in FY24, alongside an Interim Dividend of INR 1.30 and a proposed Final Dividend of INR 1.30.

EPS Analysis #

• Consolidated: Basic and Diluted EPS grew 41.8% YoY to INR 8.48 in FY24 from INR 5.98 in FY23.
• Standalone: Basic EPS grew 46.2% YoY to INR 6.58 in FY24 from INR 4.50 in FY23. Diluted EPS grew to INR 6.57 in FY24.

Cash Management Analysis of Triveni Turbine Limited (FY 2023-24) #

Cash Flow Analysis #

Based on Consolidated Statement of Cash Flows

• Operating Cash Flow (OCF): Net cash inflow from operating activities stood at INR 2,686.43 million in FY24, a significant increase from INR 1,663.91 million in FY23. This growth was driven primarily by higher Profit Before Tax (INR 3,577.68 million vs INR 2,554.80 million) and favorable working capital adjustments, particularly increases in trade payables and other liabilities, offsetting increases in inventories and receivables.
• Investing Cash Flow (ICF): Net cash outflow from investing activities was INR 1,972.57 million in FY24, compared to an inflow of INR 1,008.58 million in FY23. Key components include:
  • Purchase of Property, Plant & Equipment (Capex): INR 367.76 million (FY23: INR 477.40 million).
  • Net increase in current investments: INR (1,118.52) million (FY23: INR 1,454.90 million inflow).
  • Investment in Bank Deposits (net): INR (1,361.13) million outflow (FY23: INR 10.70 million outflow).
  • Interest Received: INR 463.64 million (FY23: INR 312.28 million).
• Financing Cash Flow (FCF): Net cash outflow from financing activities was INR 782.25 million in FY24, significantly lower than the INR 2,650.31 million outflow in FY23. The primary driver in FY23 was the share buyback (INR 1,900 million). FY24 outflow mainly comprises dividend payments (INR 731.44 million) and lease liability payments.
• Free Cash Flow (FCF): Calculated as OCF minus Capex (Purchase of PPE), FCF for FY24 is INR 2,318.67 million (INR 2,686.43 million - INR 367.76 million). This represents approximately 86% of the Consolidated PAT (INR 2,694.58 million), indicating strong cash generation capability after reinvestment in fixed assets. (FY23 FCF was INR 1,186.51 million).

Working Capital Management Efficiency #

• The company highlights enhanced working capital management, reporting a negative working capital position of INR 1,951 million as of March 31, 2024.
• Inventory Turnover Ratio (Consolidated): Increased to 3.84x in FY24 from 3.58x in FY23, suggesting improved inventory management efficiency.
• Debtors Turnover Ratio (Consolidated): Marginally decreased to 10.76x in FY24 from 10.80x in FY23, reflecting slightly slower collections relative to the significant revenue growth.
• Overall negative working capital indicates effective management, potentially funded by customer advances (INR 3,759.91 million as per Consolidated Balance Sheet) and efficient payable management.

Capital Expenditure (Capex) Analysis #

• Total Capex (Purchase of PPE, Consolidated) was INR 367.76 million in FY24 (FY23: INR 477.40 million).
• The notes mention investments in infrastructure at the Sompura plant, establishing a facility in South Africa (via subsidiary), and ERP system upgrades (intangible asset additions, Standalone: INR 20.41 million).
• The Directors’ Report mentions augmenting capacities in-house and with sub-vendors.
• The establishment of a subsidiary and planned workshop in the USA (Houston, Texas) represents a significant strategic investment area.
• Capex appears directed towards capacity expansion (Sompura), geographic expansion (South Africa, USA), and digitalization (ERP).

Dividend and Share Buyback Trends #

• Dividend FY24:
  • Interim Dividend: INR 1.30 per share (130%).
  • Special Dividend: INR 1.00 per share (100%).
  • Proposed Final Dividend: INR 1.30 per share (130%).
  • Total FY24 Dividend: INR 3.60 per share (360%).
  • Total Outlay: INR 1,144.35 million.
  • Dividend Payout Ratio (Consolidated PAT): Approx. 42.5% (INR 1,144.35 mn / INR 2,694.58 mn).
• Dividend FY23 (Paid in FY24/FY23): A final dividend for FY22 (INR 0.85) and a special dividend for FY22 (INR 0.70) were paid during FY23, totaling INR 499.77 million.
• Share Buyback:
  • No buyback in FY24.
  • FY23: Buyback of 5,428,571 shares at INR 350/share for an aggregate of INR 1,900 million.
  • FY19: Buyback of 6,666,666 shares at INR 150/share for an aggregate of INR 1,000 million.
• The company maintains a consistent dividend policy alongside opportunistic share buybacks, returning significant capital to shareholders, enabled by strong cash generation.

Debt Service Coverage #

• The company is stated to be virtually debt-free, with principal financial liabilities comprising trade payables and lease liabilities. The Consolidated Balance Sheet shows negligible current borrowings (INR 0.06 million).
• Finance costs primarily relate to lease liabilities.
• Given the negligible interest-bearing debt, a traditional Debt Service Coverage Ratio (DSCR) based on borrowings is not meaningful. The strong OCF provides substantial coverage for lease payments

Liquidity Position #

• Liquidity:
  • Current Ratio (Consolidated): Improved to 1.99x in FY24 from 1.86x in FY23, indicating strong short-term solvency.
  • Cash and Bank Balances (Consolidated, including Current Investments): Significant increase to INR 8,830.64 million as of March 31, 2024, from INR 6,236.05 million as of March 31, 2023.
  • The company maintains a robust liquidity position with substantial cash reserves.
• Cash Conversion Cycle (CCC): The improving inventory turnover, relatively stable debtor turnover despite high growth, and negative working capital position strongly suggest an efficient, likely negative, cash conversion cycle. This implies the company collects cash from customers before it needs to pay its suppliers, further enhancing liquidity.

Free Cash Flow (FCF) Yield Trends #

• FCF (Consolidated, OCF - Capex): INR 2,318.67 million in FY24 (FY23: INR 1,186.51 million).
• Market Capitalisation: INR 170.6 billion as of March 31, 2024.
• FCF Yield (FCF / Market Cap) for FY24: Approx. 1.36% (INR 2,318.67 million / INR 170,600 million).
• While the yield percentage is modest, the absolute FCF generation is strong and growing, representing ~86% of PAT in FY24. This supports dividends, potential future buybacks, and strategic investments without reliance on debt. The significant increase in FCF from FY23 to FY24 reflects improved operational efficiency and profitability.

Triveni Turbine Limited (FY 2023-24) Financial Analysis #

Profitability Analysis #

• Revenue Growth: Consolidated revenue from operations grew significantly by 32.6% year-over-year (YoY) to ₹16,539 million in FY24. Standalone revenue increased by 27.3% YoY to ₹13,785.7 million.
• Earnings Growth: Consolidated EBITDA increased by 37.9% YoY to ₹3,810 million. Consolidated Profit After Tax (PAT) rose by 39.7% YoY to ₹2,695 million. Standalone PAT grew by 44.3% YoY to ₹2,090.5 million.
• Margin Expansion: Consolidated EBITDA margin improved by approximately 80 basis points to 23.0% in FY24 from 22.2% in FY23, attributed primarily to higher international sales and operational efficiencies. Consolidated PAT margin expanded by 80 basis points to 16.3%. Standalone EBITDA and PAT margins also showed improvement, reaching 22.2% and 15.2% respectively.
• Return Ratios: Consolidated Return on Equity (ROE) improved substantially to 31.3% in FY24 from 23.8% in FY23. Consolidated Return on Capital Employed (ROCE) stood at 41.5% in FY24. These indicate enhanced profitability and efficient use of capital.
• Trend: The company demonstrates a consistent upward trend in key profitability metrics over the past three financial years.

Liquidity Analysis #

• Current Ratio: The Consolidated Current Ratio improved

Triveni Turbine Limited (FY 2023-24) Financial Analysis #

Revenue and Profitability #

• Consolidated Performance: Revenue from operations grew 32.6% YoY to ₹16,539 million. EBITDA increased 37.9% YoY to ₹3,810 million, with EBITDA margin improving by 80 bps to 23.0%. Profit After Tax (PAT) grew 40.0% YoY to ₹2,695 million, with PAT margin expanding 80 bps to 16.3%.
• Standalone Performance: Revenue from operations increased 27.3% YoY to ₹13,785.7 million. EBITDA grew 42.3% to ₹3,062.0 million. PAT increased 44.3% to ₹2,090.5 million.
• Order Booking: Consolidated order booking reached a record ₹18.78 billion, up 17% YoY. Product orders grew 10% to ₹12.61 billion, while Aftermarket orders surged 34% to ₹6.17 billion. Export orders constituted 54% of total bookings (₹10.19 billion, +51% YoY).
• Dividend: Total dividend declared for FY24 is ₹3.60 per share (360% of face value). Total payout amounts to ₹1,144.35 million, representing 43% of consolidated PAT.

Market Position and Competition #

• Market Standing: Positioned among the Top 2 globally in its addressable market (<100 MW steam turbines, ex-China/Japan). Outperformed market trends and gained market share.
• Market Trends: The global <100 MW steam turbine market (ex-China/Japan) grew 3% YoY in 2023. A significant shift towards thermal renewable fuel-based power generation is observed.
• Competitive Landscape: Operates in a technically challenging field dominated by large multinationals. Brand reputation is strong, reflected in complex orders.
• Indian Market: Holds a leading position in industrial heat & power solutions. Key domestic drivers include captive power demand and process industries for Combined Heat & Power (CHP).

Product and Service Performance #

• Product Segment: Manufactures industrial steam turbines up to 100 MW. FY24 product order booking hit a record ₹12.61 billion (+10% YoY).
• Aftermarket Segment: Offers spares, maintenance, and refurbishment. FY24 Aftermarket revenue was ₹5.38 billion (+31% YoY), contributing 33% of total revenue. Order booking reached ₹6.17 billion (+34% YoY), also 33% of total.

Geographic Distribution and Market Penetration #

• Global Reach: Presence in over 80 countries with installations exceeding 6,000 turbines (16+ GW capacity).
• Revenue Mix (Consolidated FY24): Exports contributed 46.4% (₹7.68 billion, +37.7% YoY), while Domestic contributed 53.6% (₹8.86 billion, +28.4% YoY).
• Order Booking Mix (Consolidated FY24): Exports accounted for 54% (₹10.19 billion, +51% YoY). Domestic accounted for 46% (₹8.59 billion, -8% YoY).
• Strategy: Focus on geographic diversification and leveraging the large installed base for generating new business.

Capital Expenditure and Return Metrics #

• Return Metrics (Consolidated FY24): Return on Equity (ROE) improved significantly to 31.3%. Return on Capital Employed (ROCE) increased to 41.5%.
• Capital Expenditure: Additions to Property, Plant & Equipment (PPE) and intangible assets were ₹356.6 million (Standalone). R&D expenditure (Standalone) was ₹194.16 million.

Operational Efficiency #

• Working Capital: Maintained negative working capital at -₹1,951 million (Consolidated).
• Cost Management: Cost of Goods Sold (Consolidated) as % of sales decreased slightly to 58.3%. Employee cost (Consolidated) as % of sales declined to 9.8%.
• Cash Flow: Generated strong Free Cash Flow of ₹2,368 million (Consolidated). Cash and investments stood at ₹8,831 million (Consolidated) as of March 31, 2024.
• Manufacturing & Supply Chain: Utilizes two main plants in Bengaluru, plus facilities in South Africa and USA (under development).
• Digitalization: Successfully upgraded ERP to SAP S/4HANA (Cloud).

Growth Initiatives #

• Expanding global footprint, particularly targeting the US market.
• Driving Aftermarket growth, focusing on high-value refurbishment and efficiency enhancement services.
• Continued R&D investment in high-efficiency turbines and new energy transition technologies. Total 374 IPR filings.
• Strategic talent acquisition and development to support expansion.

Triveni Turbine Limited (TTL) - FY 2023-24 Financial Analysis #

Strategic Goals and Progress #

• Objective: TTL aims to be a global leader in energy-efficient industrial steam turbine solutions (<100 MW), emphasizing sustainability and renewable energy applications. Key strategies include global expansion, aftermarket service growth (including refurbishment), technological innovation (efficiency, sCO2/tCO2), and maintaining an asset-light model.
• Progress: FY24 marked the third consecutive year of record performance across revenue, profitability, and order booking. Exports grew significantly, contributing 46% to revenue and 54% to order intake. The aftermarket segment now represents 33% of both revenue and orders. The establishment of a US subsidiary (Triveni Turbines Americas Inc.) marks a key step in penetrating the North American market. The closing order book stood strong at ₹15.5 billion.

Competitive Advantages and Market Positioning #

• Strengths: Core competencies lie in high-tech, engineered-to-order turbine solutions with benchmark efficiencies, robust aftermarket capabilities (Triveni REFURB for own and competitor equipment), an asset-light manufacturing model leveraging subcontracting, strong customer relationships (high repeat business), a wide global network (80+ countries), and significant R&D/IPR portfolio (374 filings).
• Market Position: TTL ranks among the top 2 players globally in the <100 MW steam turbine segment (ex-China/Japan), outperforming market growth. It holds a leading position in thermal renewable applications (Biomass, Waste-to-Energy, Waste Heat Recovery, Geothermal), which constituted 67% of the global <100 MW market in 2023. The company is strengthening its presence in the API segment for Oil & Gas.

Innovation Initiatives and R&D Effectiveness #

• Focus: R&D is directed towards enhancing turbine efficiency (high-speed products, aero-solutions), customizing for niche markets (API), and developing sustainable technologies (supercritical/transcritical CO2 power blocks/cooling, thermal batteries). Refurbishment capabilities are enhanced through reverse engineering and advanced diagnostics.
• Effectiveness: R&D efforts yielded record order bookings, successful commissioning of high-speed units, API order wins, and complex refurbishment projects enhancing efficiency/reliability of multi-OEM equipment. Development of sCO2/tCO2 technology is progressing towards commercialization. R&D expenditure was 1.41% of turnover in FY24. Digital transformation initiatives (SAP S/4HANA, HCMS) are underway to improve efficiency.

M&A Strategy and Execution #

• TTL’s growth is primarily organic, supplemented by strategic establishment of overseas subsidiaries (UK, UAE, South Africa, USA) to build local presence, service capabilities, and market access. The integration of the >30 MW business from the former JV (now TESL) into the parent company is complete.

Management’s Track Record in Execution #

• Financial Performance: Management delivered exceptional results in FY24: Revenue +33% (₹16.54 Bn), EBITDA +38% (₹3.81 Bn, 23.0% margin), PAT +40% (₹2.69 Bn, 16.3% margin), Order Booking +17% (₹18.78 Bn).
• Operational Efficiency: Demonstrated ability to scale manufacturing, manage supply chains effectively despite geopolitical challenges, and maintain an asset-light structure. Efficient working capital management resulted in a negative ₹1,951 million position.
• Strategic Execution: Successfully advanced internationalization (exports +38% revenue, +51% order booking), grew the high-margin aftermarket business (+31% revenue, +34% order booking), and progressed key innovation projects.

Capital Allocation Strategy #

• Priorities: Capital is allocated towards R&D, strategic capability enhancement (e.g., US facility, digitalization), efficient working capital management, and shareholder returns.
• Shareholder Returns: Consistent dividend policy. FY24 proposed total dividend of ₹3.60/share (Interim ₹1.30 + Special ₹1.00 + Final ₹1.30), representing a 43% payout of consolidated PAT (₹1.14 Bn outlay). A buyback was completed in FY23.
• Financial Health: Strong cash generation (FCF ₹2,368 Mn, ~88% of PAT), healthy cash reserves (₹8.83 Bn incl. investments), and high returns (ROE 31.3%, ROCE 41.5%).

Organizational Changes and Impact #

• Leadership Transition: Smooth succession planning evident with the appointment of internal candidates S.N. Prasad as CEO and Sachin Parab as COO, following the transition of long-serving ED Arun Mote. Pulkit Bhasin appointed as Company Secretary.
• Board Refreshment: Appointment of Ms. Amrita Gangotra and Ms. Sonu Bhasin as Independent Directors enhances Board diversity and expertise following the cessation/resignation of two directors.
• Human Capital: Significant workforce growth (>30% in 2 years) supports expansion. Focus on talent development and digital HR tools (HCMS) aims to enhance productivity and employee engagement. Employee cost as a percentage of sales decreased to 9.8% despite headcount increase.

Outlook #

Management expresses optimism for FY25, citing a robust order book, strong enquiry pipeline, expanding global footprint, and favorable industry trends towards renewable energy, energy efficiency, and decentralized power. The aftermarket segment, particularly refurbishment, is expected to be a key growth driver.

ESG Framework: Triveni Turbine Limited (TTL) - Financial Analysis Report (FY 2023-24) #

Financial Performance Summary (FY24) #

Consolidated Results #

TTL reported record financial performance for the third consecutive year. Revenue from operations increased by 32.6% YoY to ₹16,539 million. EBITDA grew 37.9% YoY to ₹3,810 million, with the EBITDA margin expanding by 80 bps to 23.0%. Profit After Tax (PAT) rose 39.7% YoY to ₹2,695 million, yielding a PAT margin of 16.3%, an improvement of 80 bps. Return on Equity (ROE) stood at 31.3% (vs. 23.8% in FY23) and Return on Capital Employed (ROCE) was 41.5% (vs. 31.2% in FY23).

Standalone Results #

Revenue from operations increased by 27.3% YoY to ₹13,786 million. EBITDA grew 42.3% to ₹3,062 million, with margin expansion of 235 bps to 22.2%. PAT increased by 44.3% to ₹2,090 million, with the PAT margin improving by 179 bps to 15.2%.

Analysis #

The company demonstrated strong top-line and bottom-line growth, coupled with significant margin improvements at both consolidated and standalone levels. Enhanced profitability and efficient capital utilization are reflected in the strong ROE and ROCE figures. Consolidated performance growth slightly outpaced standalone, indicating positive contributions from subsidiaries. Higher international sales and operational efficiencies contributed to margin expansion.

Operational Highlights & Business Segments #

Order Booking #

Consolidated order booking reached a record high of ₹18.78 billion, a 17% YoY increase. Export orders grew robustly by 51% to ₹10.19 billion (54% of total), offsetting an 8% decline in domestic orders (₹8.59 billion). Product segment orders increased by 10% to ₹12.61 billion, while the Aftermarket segment saw a significant 34% growth to ₹6.17 billion.

Revenue Mix (Consolidated) #

Exports contributed 46.4% (₹7.68 billion, +37.7% YoY) and Domestic contributed 53.6% (₹8.86 billion, +28.4% YoY). Product sales accounted for 67.5% (₹11.16 billion, +33.5% YoY) and Aftermarket sales for 32.5% (₹5.38 billion, +30.7% YoY).

Key Drivers #

Growth was driven by orders from renewable energy projects (Biomass, WtE, WHR), industrial customers, independent power producers (IPPs), and API turbines, particularly in international markets. The Aftermarket segment benefited from refurbishment orders (including other OEMs) and spares/services demand.

Analysis #

The strong order intake provides healthy revenue visibility. The significant growth in export orders underscores the success of TTL’s internationalization strategy. The Aftermarket segment is becoming increasingly crucial, contributing substantially to both orders and revenue, driven by a wider service portfolio including refurbishment.

Financial Analysis Report: Triveni Turbine Limited (FY 2023-24) #

Auditor’s Opinion and Qualifications #

• Opinion: The Independent Auditors (M/s. Walker Chandiok & Co LLP) issued an unmodified opinion on both the Standalone and Consolidated Financial Statements for the year ended March 31, 2024. They state that the financial statements give a true and fair view in conformity with Indian Accounting Standards (Ind AS) and the Companies Act, 2013.
• Key Audit Matter (KAM): The auditors identified “Write-downs of inventories to net realisable value” as a Key Audit Matter for both standalone and consolidated audits. This highlights the significant judgment involved in assessing inventory obsolescence, slow movement, and net realizable value, particularly given the nature of the inventory and long product life cycles requiring spares. This KAM does not qualify the opinion on the financial statements.
• Qualification on Maintenance of Accounts: A qualification exists concerning the maintenance of books of account under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014. The auditors noted that while the accounting software (SAP S/4HANA) has an audit trail (edit log) feature which was operated during the year, this feature was not enabled at the database level. This represents a non-compliance with the requirement for a complete audit trail, impacting the verification of data integrity at the database level, although the auditors did not note any instances of tampering where the feature was enabled. (Standalone Auditor’s Report Para 17(h)(vii), Consolidated Auditor’s Report Para 18(h)(vi), Note 46 Standalone, Note 48 Consolidated).
• Other Matter (Consolidated): The auditors relied on the reports of other auditors for 6 subsidiaries and 1 joint venture for the consolidated financial statements, including conversion adjustments for 5 foreign subsidiaries. This is standard practice and does not qualify the opinion.

Key Accounting Policies and Changes #

• Basis: Financial statements are prepared under the historical cost convention, except for certain financial instruments measured at fair value, in compliance with Ind AS notified under the Companies Act, 2013.
• Revenue Recognition: Revenue from goods sale is recognised at a point in time (control transfer, usually delivery). Service revenue (E&C, O&M) is recognised based on the stage of completion (input/output methods as appropriate). Construction contract revenue uses the percentage-of-completion method based on cost incurred relative to total estimated cost.
• Inventories: Valued at the lower of cost (weighted average) and net realizable value (NRV). Work-in-progress and finished goods cost includes direct costs and allocated indirect costs.
• Property, Plant & Equipment (PPE): Stated at cost less accumulated depreciation and impairment. Depreciation is on a straight-line basis over estimated useful lives (aligned with Schedule II, with specific lives for certain items like tools/spares).
• Intangible Assets: Stated at cost less accumulated amortization (straight-line over useful lives, e.g., software 3-5 years, designs 6 years, customer relationships/contracts 1-5 years) and impairment.
• Leases (Ind AS 116): Right-of-Use (ROU) assets and corresponding Lease Liabilities are recognised for leases, except short-term and low-value leases which are expensed. ROU assets are depreciated over the shorter of lease term or useful life.
• Financial Instruments: Classified and measured at amortised cost, Fair Value Through Other Comprehensive Income (FVTOCI), or Fair Value Through Profit or Loss