TRITURBINE - Triveni Turbine Limited Share Price

Management Outlook and Major Points:

Outlook:
Triveni Turbines projects robust medium-term performance, supported by a record order book (Rs.18.19 billion as of December 2024) and strong visibility across domestic and export markets. The company anticipates sustained growth driven by diversification in products, geographies, and applications, with a focus on renewable energy, waste-to-power, and CO2-based energy storage systems. The Aftermarket segment and new technologies like the CO2 turbine are expected to be key growth drivers.

Key Highlights:

1. Financial Performance:

   • Q3 FY25 revenue rose 17% YoY to Rs.5.03 billion, with exports contributing 49% of sales.
   • EBITDA surged 30% YoY to Rs.1.31 billion (26.1% margin), while PAT grew 36% to Rs.926 million.
   • 9M FY25 revenue reached Rs.14.7 billion (+23% YoY), with exports up 25%.

2. Order Book & Segments:

   • Order intake in Q3 was Rs.5.26 billion (66% from exports).
   • Product segment orders grew 30% in 9M FY25; Aftermarket turnover hit Rs.1.8 billion (+22% YoY).
   • Domestic enquiry pipeline rose 75% YoY, signaling potential recovery despite subdued Q3 orders.

3. Strategic Initiatives:

   • CO2 Energy Storage: Secured a Rs.2.9 billion project with NTPC for a 160 MWh storage system, marking entry into long-duration energy storage.
   • R&D Focus: Investing in CO2-based systems (sub/supercritical) and steam cycle efficiency to drive innovation and cost reduction.
   • Global Expansion: U.S. operations progressing, targeting service and refurbishment markets; SADC region remains strong.

4. Market Diversification:

   • Export markets (renewables, oil & gas, cogeneration) offset domestic cyclicality.
   • Aftermarket expansion emphasizes high-margin services and third-party refurbishment.

5. Challenges & Mitigation:

   • Domestic order delays due to macro factors; however, strong enquiry pipeline suggests Q4 rebound.
   • Geopolitical/regulatory risks addressed through local supply chains and agile execution.

Conclusion:
Triveni Turbines aims to sustain growth via technology leadership, geographic diversification, and operational efficiency, leveraging new product lines (e.g., CO2 systems) and Aftermarket growth to navigate market cycles.

Question 1:
What is the size of the addressable market (TAM) for CO2-based energy storage systems in India over the next 2"“3 years? How do these projects differ from Triveni's core business, and what profitability can be expected?
Answer:
Triveni's CO2-based energy storage project (160 MWh for NTPC) is a new product line, leveraging collaboration with Energy Dome. The system uses CO2 for grid stabilization and aligns with Triveni's electromechanical expertise. While profitability for this pilot is modest due to initial costs, future projects aim for cost parity with lithium-ion solutions, targeting domestic margins. The TAM is undefined but represents a scalable, high-potential revenue stream.

Question 2:
Why was domestic order inflow subdued in Q3, and are there sector-specific weaknesses or strengths in the domestic market?
Answer:
Domestic order inflow softened due to delayed finalizations despite a 59% YoY growth in Q3 enquiries. Sectors like steel, cement, and oil & gas showed improved enquiry traction, while distillery orders progressed. Management expects Q4 order momentum to rebound, supported by a 75% YoY increase in the domestic enquiry pipeline.

Question 3:
How are geopolitical tensions and tariff wars impacting Triveni's export markets, and which new geographies contributed to export growth?
Answer:
Export markets remain resilient, with demand driven by renewables (biomass, waste-to-energy). Triveni mitigates geopolitical risks via supply chain localization and agility. New export orders came from diverse applications (geothermal, small modular reactors), though specific geographies were not disclosed. Margins benefit from a diversified, value-added product mix.

Question 4:
What is the progress and outlook for Triveni's U.S. operations, including investment and client traction?
Answer:
U.S. operations are in the investment phase, incurring Rs.200 million annual losses (factored into FY25). Enquiry traction is rising, with orders expected in H2 FY25. Focus includes local certifications and workshops to build credibility. Applications span oil & gas, process cogeneration, and renewables, with long-term growth potential.

Question 5:
Why has Aftermarket order growth stalled despite expansions, and which regions/segments are underperforming?
Answer:
Aftermarket orders declined due to reduced outages in South Africa (improved grid reliability) but saw higher-margin parts/services mix. U.S. enquiry momentum is rising. Refurbishment and upgrades for third-party turbines remain growth drivers, with R&D focused on high-value segments.

Question 6:
How does the CO2 turbine project's scope and profitability compare to core offerings? What is Triveni's execution timeline?
Answer:
The Rs.2.9 billion NTPC project includes CO2 turbine design, fabrication, and balance-of-plant work. Triveni's scope (excludes civil works) focuses on indigenized components. Execution spans 12"“18 months, with margins expected to normalize as supply chains mature. The project diversifies revenue but is not yet a profitability driver.

Question 7:
What is Triveni's capex plan for FY25"“26, given U.S. expansion and CO2 initiatives?
Answer:
Capex will rise to Rs.1.2"“1.5 billion over 2"“3 years for R&D infrastructure (test beds), modular manufacturing bays, and U.S. capability-building. This includes Rs.200 million for a new assembly bay in India and R&D investments to support product innovation.

Question 8:
What is Triveni's domestic market share, and how is pricing competition affecting order selectivity?
Answer:
Domestic market share is ~50%, with competitive intensity rising. Triveni avoids price wars, emphasizing value (service, efficiency). Process cogeneration and renewables dominate domestic orders, with a focus on high-margin segments. FY25 domestic growth hinges on Q4 order conversions.

Question 9:
How does Triveni's CO2 storage cost compare to lithium-ion, and what is the long-term viability?
Answer:
Current CO2 storage costs (~$200,000/MWh) aim to reach $120,000"“125,000/MWh for parity with lithium-ion. The 30"“35-year lifespan and minimal degradation offer long-term viability. Success depends on scaling supply chains and proving pilot performance, with commercialization targeted post-FY25.

Question 10:
What hiring plans exist for global service networks, and how will this support growth?
Answer:
Triveni plans aggressive hiring for service engineers (100s over 2"“3 years), prioritizing technical skills and customer-centric attitudes. Expansion in the U.S., SADC, and India will bolster Aftermarket capabilities, targeting higher-margin refurbishment and digital services.