Triveni Engineering & Industries Ltd. (TEIL) has unveiled ambitious plans to enhance its turbine production capacity and restructure its business operations, as outlined in the company's latest investor brief for Q1 FY26.

Expansion of Turbine Production

The company has announced its intention to increase turbine production, a move that aligns with its strategy to strengthen its position in the power transmission sector. This expansion is expected to cater to growing demand in both domestic and international markets.

Focus on Defense and Export Engineering Orders

Triveni Engineering is also setting its sights on expanding its defense and export engineering order book. This diversification strategy could potentially open up new revenue streams and reduce dependence on any single market segment.

Business Segment Separation

In a significant strategic move, Triveni Engineering plans to accelerate value creation through the separation of its distillery, co-generation, and sugar segments by FY26. This restructuring is aimed at enhancing operational efficiency and potentially unlocking shareholder value.

Financial Performance

For Q1 FY26, Triveni Engineering reported:

The company's net turnover increased by 23%, supported by a 53% increase in alcohol dispatches and a 14% increase in consolidated sugar dispatches, along with improved sugar realizations.

Segment-wise Performance

Sugar Business

• Sugar realization improved to ₹ 40,421.00/MT, a 4% increase over the corresponding previous period.
• Consolidated sugar dispatches increased by 13.6% to 258,196 tonnes.

Alcohol Business

• Alcohol production for the quarter stood at 6.5 crore litres, a 19% increase year-over-year.
• Alcohol sales volume increased by 53% to 6.2 crore litres.

Engineering Business

• The Power Transmission Business (PTB) reported a 15% increase in order booking.
• The closing order book for PTB stood at ₹ 423.00 crore, a 38% improvement over the corresponding previous period.
• The total engineering business order book (including PTB) reached ₹ 1,975.00 crore, up 32% compared to the same quarter last year.

Management Commentary

Mr. Dhruv M. Sawhney, Chairman and Managing Director of Triveni Engineering & Industries Ltd., commented on the company's performance and outlook: "As expected, the performance during the quarter was muted. During this period, the profitability of sugar gets affected as the off-season costs are expensed out and further, in Distillery, the margins of FCI-rice, which formed 27% of total alcohol sales, were relatively lower."

He added, "Looking ahead, I remain cautiously optimistic. Early monsoon trends have been encouraging and bode well for the agricultural sector, particularly for the sugarcane crop in UP. Our continuous field surveys indicate a healthy crop with minimal pest or disease incidence."

Triveni Engineering's strategic initiatives, including production expansion and business restructuring, are poised to position the company for long-term growth and value creation in the coming years.

Triveni Engineering & Industries Ltd , a leading player in the sugar and engineering sectors, reported a significant decline in its consolidated net profit for the first quarter, despite a notable increase in revenue.

Financial Performance

The company's consolidated net profit attributable to owners of the company for Q1 stood at ₹4.41 crore, marking a substantial decrease from ₹31.27 crore in the same period last year. This represents a year-on-year decline of approximately 85.9%.

Despite the sharp drop in profitability, Triveni Engineering saw its revenue from operations grow to ₹1,954.46 crore, up from ₹1,534.03 crore in the corresponding quarter of the previous year, reflecting a 27.4% increase.

Segment-wise Performance

Sugar & Allied Businesses

The sugar segment, which includes sugar and distillery operations, remained the primary revenue driver:

• Sugar revenue increased to ₹1,169.57 crore from ₹999.48 crore in the previous year.
• Distillery revenue saw significant growth, reaching ₹784.35 crore compared to ₹522.38 crore in the same quarter last year.

Engineering Businesses

The engineering segment, comprising power transmission and water businesses, showed mixed results:

• Power transmission revenue slightly decreased to ₹50.29 crore from ₹54.78 crore.
• Water business revenue marginally increased to ₹54.29 crore from ₹51.05 crore.

Profitability and Margins

The company's profitability was significantly impacted, with EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) declining sharply:

• EBITDA fell to ₹54.00 crore from ₹862.00 crore in the corresponding quarter.
• EBITDA margin compressed to 2.74% from 5.62% in the previous year.

Other Financial Highlights

• Finance costs increased to ₹38.15 crore from ₹26.41 crore year-over-year.
• Employee benefits expense rose to ₹110.46 crore from ₹96.03 crore.
• Depreciation and amortization expenses increased to ₹35.37 crore from ₹28.89 crore.

Management Commentary

While the company did not provide specific management comments in the financial release, the significant decline in profitability despite revenue growth suggests challenges in maintaining margins, possibly due to increased costs or market pressures.

Future Outlook

The company's board has previously approved a Composite Scheme of Arrangement involving the amalgamation of Sir Shadi Lal Enterprises Limited into Triveni Engineering & Industries Limited and the demerger of its Power Transmission Business. The approval from stock exchanges for this scheme is still awaited.

Investors and analysts will be closely watching how Triveni Engineering navigates the challenging environment and implements strategies to improve profitability in the coming quarters.

Note: All figures are based on the consolidated financial results for Q1 ended June 30.