IGI Logo

Trident reported consol. EBITDA of INR2.6bn, lower than JMfe of 2.8bn primarily on account of higher input costs. Revenue from home–textile segment increased 5% QoQ while paper and chemicals segment increased 4.5% QoQ. Textile segment reported EBIT margins of 7.3% during the quarter vs 7% during 2Q while margins for the paper and chemicals segment remained flat QoQ to 24% vs 24.1% in 2Q. Consolidated EBITDA margins came in at 14.3% vs 2Q margin of 13.4% tracking lower other expense. Net debt increased by ~22% QoQ to INR14.6bn. W.r.t to its earlier announced capex plan a) company has operationalized ~95k spindles during 3Q out of total proposed addition of 193k spindles. Structural drivers of increased market share in the US, US ban on Xinjiang imports, duty reimbursement by GOI and market share gain on China+1 theme are likely to drive earnings going forward. Further, FTAs with UK/EU over time could likely increase the addressable market size, possibly leading to further re-rating. Maintain BUY (refer exhi. 4).

? Textile margins improve marginally: Revenue from Textiles registered a growth of 5% QoQ (up 79.3% YoY) to INR19.3b. Textile segment reported an EBIT of INR1.4bn as against an EBIT of INR1.3bn in 2Q. Revenue from Paper and Chemicals grew 4.5% QoQ (-9.6% YoY) at INR3bn. EBIT margin remained flat QoQ (-747bps YoY) to 24%. Paper and chemical EBIT increased by 4.3% QoQ to INR0.7bn. Consol. revenue grew 2% QoQ to INR18.3bn (est. INR18.9bn). EBITDA margin increased 90bps to 14.3%. Net debt increased by 21.8% QoQ to INR14.6bn vs ~INR12bn in 2QFY24.

? Restructuring of board to empower professional management: Trident previously announced restructuring of Company’s Board to empower professional management amidst decision of Mr Rajinder Gupta (Founder and Chairman) to step down due to health issues and family commitments. The company appointed five professional managing directors to enhance empowerment, drive strategy and catapult growth of each of the business segments. Further, the board appointed Mr. Rajinder Gupta as ‘Chairman Emeritus’ of the Company. Further company recently appointed Mr. Deepak Singhal as CEO of Paper and Chemical division.

? Planned capex on-track, new patent in bed sheet division: The Company is progressing well on its capex plan which includes a) plan worth INR12.8bn towards 193k spindles of which ~95k spindles operationalized during 3Q. Further company recently has been granted patent for its “fitted sheet with improved gripping effect”. The current innovation entails a technique for manufacturing a fitted sheet that offers improved corner grip to accommodate mattresses of different thicknesses. With this patent, the company will deliver its Technofit technology which provides enhanced gripping, prevents seam ear, and do not deteriorate even after several washes.