Sharekhan has given Buy recommendation for Triveni Engineering and Industries with a target price of Rs. 125 in its research report issued on Apr 13, 2021

Sharekhan’s research report on Triveni Engineering and Industries

With the government focusing on achieving ethanol blending of 20% by CY2025; India’s ethanol requirement will increase significantly (4-5 billion litres required for 10% blending). TEIL is adding 160 KLPD B-Heavy/Cane juice and a 40 KLPD grain-based distillery (to be operational by Q3FY22). With augmentation of distillery capacity, distillery revenues will clock a 21% CAGR with realisation inching up to Rs. 52 per litre; margins to also improve in the coming years. With improvement in profitability and stable working capital; free cash flow (FCF) is expected to improve (cumulative FCF of ~Rs. 2,060 crore likely over FY20-23) and aid better dividend payouts/ prudent buyback policy.


We maintain a Buy on Triveni Engineering & Industries (TEIL) with revised target price of Rs. 125. Attractive valuation of 4.7x versus historical average of 6.3x and changing industry dynamics make it better play in the sugar segment.