Shares of Triveni Engineering & Industries Limited have delivered more than 190 per cent return to its shareholders in the past one year. The stock rose 8 per cent to hit an intraday high of Rs 203.80 on the Bombay Stock Exchange (BSE).
The small-cap stock surged after the company announced the signing of a 10-year business agreement with GEAE Technology USA to locally manufacture the LM2500 gas turbine base and enclosure.
“Under the agreement, GEAE Technology USA has licensed Triveni to locally manufacture the LM2500 gas turbine’s base frame, acoustic enclosure, and lubricating oil skid and supply other source-controlled accessories that go into the LM 2500 gas turbine enclosure assembly,” the company said in a press release.
The LM2500 is the chosen propulsion gas turbine by the Indian Navy for many of its surface combatant vessels. The LM2500 gas turbine, with power ranging from 25 MW to 35 MW, are best in class naval propulsion gas turbines and are in service with over 40 navies globally,” it added.
In the past one year, the share price jumped from Rs 69 to Rs 203.8 mark — logging around 195 per cent return in this period. The scrip has jumped around 183 per cent since the beginning of this year.
An amount of Rs 5 lakh invested in this multibagger stock a year ago would have turned into Rs 14.76 lakh today.
With a market capitalisation of more than Rs 4,800 crore, the shares stand higher than 20 day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages.
Brokerage house Dolat Capital noted that the sugar business has witnessed some headwinds in H1FY22 on account of lower allocation of monthly sugar quota which has restricted the sugar dispatches (down 23.5 per cent YoY in H1FY22). However, domestic sugar prices have remained firm since August 21 driven by favorable global and domestic factors.
Commenting on the different segments, the brokerage house said that the distillery segment continues to deliver healthy growth led by higher proportion of B heavy ethanol sales (Produced 77 per cent Ethanol from B Heavy molasses in Q2FY22 vs 26 per cent in Q2FY21).
“New distillery expansions – 220 KLPD (commissioning in Q4FY22) and 100 KLPD (commissioning in Q1FY23) will provide further impetus to the overall revenue and profitability growth. Also, the Engineering Business performance improved in Q2FY22 with overall economic recovery and resumption in industrial activity,” it said in a report.
“With new distilleries set to come in play in Q4FY22 and Q1FY23 expanding its overall capacity to 660 KLPD and sugar realisations expected to remain firm at Rs35-36/kg we remain positive on the stock. We roll forward FY24E numbers and maintain our ‘Buy’ rating with a SOTP based target price of Rs 252 with an implied P/Bv of 2.1x,” it added.