IGI Logo

Muted Q2; all eyes on order finalization

Quick Pointers:

* Export order inflow declined by ~19% YoY to Rs2.5bn due to delay in order finalization amid tariff related uncertainties.

* Growth in H2FY26 is expected to be backended, with no further inspection delays or execution setbacks anticipated.

We revise our FY27/FY28 EPS estimates by -7.4%/-8.3% accounting for delay in dispatches and slower order conversion amid tariff-related uncertainties. Triveni Turbine (TRIV) reported a muted quarter with revenue remaining largely flat YoY, while EBITDA margin improved marginally by 41bps YoY to 22.6%. In Q2FY26 Domestic revenue declined ~20% YoY due to lower order backlog from the previous year while order inflow surged by 51.7% YoY supported by strong traction across steel, cement, infrastructure, API, and utility turbine segments. Export revenue increased ~27% YoY, aided by strong demand traction from Europe and the Middle East, though order inflows fell ~19% YoY amid tariffrelated delays and a subdued US market. The refurbishment segment continues to gain traction in the US and is expected to support near-term growth. The stock is trading at a P/E of 36.1x/32.0x on FY27/28E EPS. We roll forward to Sep’27E and downgrade our rating from ‘BUY’ to “Accumulate’ given slow order finalization, delays in dispatches and softer exports are likely to weigh on performance. We value the business at a PE of 38x Sep’27E (40x Mar’27E earlier) arriving at a TP of Rs609 (Rs650 earlier). Downgrade to “Accumulate”

We remain watchful on TRIV’s short-term challenges regarding delay in dispatches and order finalization delays amid tariffs related uncertainties despite healthy domestic order momentum. However, its long-term prospects continue to remain strong due to 1) a healthy enquiry pipeline across markets, 2) growing share of higher margin exports & aftermarket sales, 3) strong traction in both industrial & API drive turbines, and 4) a robust order book with strong inflows across businesses.

Weaker operating performance drags profitability: Consolidated revenue increased by 1.0% YoY to Rs5.1bn (PLe: Rs5.0bn) likely impacted by continued deferment of dispatches amid geopolitical uncertainties. Aftermarket revenue grew ~7.6% YoY to Rs3.3bn while Product revenue declined by ~2.2% YoY to Rs1.8bn. EBITDA grew ~3.0% YoY to Rs1.1bn (Ple: Rs998mn). EBITDA margin expanded by 41bps to 22.6% (PLe: 20.1%), driven by expansion in gross margin (+140bps YoY to 50.7%). Adj. PAT remains flattish YoY to Rs912mn (PLe: Rs855mn) due to weaker operating performance and lower other income (-6.0% YoY to Rs184mn).

Strong order book of Rs22.2bn (1.2x TTM revenue): Order intake rose 14.1% YoY to Rs6.5bn in Q2FY26, led by strong domestic growth (+51.7% YoY to ~Rs4.0bn), while exports declined 19.2% YoY to ~Rs2.5bn. Product and Aftermarket orders intake grew 13.8% and 14.6% YoY, respectively. The order book stood at Rs22.2bn with a higher domestic share (49% vs 39%) and a Product/Aftermarket mix of 86%/14%.

Please refer disclaimer at https://www.plindia.com/disclaimer/

SEBI Registration No. INH000000271