Triveni Engineering & Industries Limited has informed the Exchange about Investor Presentation
•zta·
.
PIVEDI ENGINEERING & INDUSTRIES LTD.
REF:TEIL:SE: BSE Limited Department of Corporate Services, Rotunda Building, P.J. Tower, Dalal Street, Fort, MUMBAI - 400 001 Thru: BSE Listing Centre STOCK CODE: 532356 Sub: Earning Presentation for Q3/9M FY 23
D
ate:
06F.b
eruary National Stock Exchange of India Ltd., Listing Department Exchange Plaza, 5"Floor, Bandra-Kurla Complex, Bandra (E), MUMBAI - 400 051 Thru: NEAPS STOCK CODE: TRIVENI
, +91120 4308100
+91120 4311010/11 e www .trivenigroup.com
2023
Dear Sirs,
We send herewith a copy of updated Investor Presentation on the performance of the Company for the Q3/9M FY 23 ended December 31, 2022 for your information. The same is also being made available on the Company's website www.trivenigroup.com.
Thanking you,
Yours faithfully, For Triveni Engineering & Industries Ltd.
~~!>~ lrAALLA
Group Vice President & Company Secretary M.No.A9475
Encl: As above
Co rpo rate Office: 8" Floor. Express Trade Towers, Plot 15 & 16, Sector 16-A, Naida. Uttar Pradesh - 201301, India. Registered Office: A-44, Hosiery Compl ex, Phase-II Extension, Noida-201 305, Uttar Pradesh. CIN No.: L15421UP1932PLC022174
Investor Presentation Q3/9M FY 23
February 2023
AGENDA
ABOUT THE COMPANY
PERFORMANCE OVER THE YEARS
RESULTS REVIEW Q3/9M FY 23
MARKET UPDATES
2
ABOUT THE COMPANY
3
COMPANY OVERVIEW
Integrated and diversified conglomerate in areas of sugar, ethanol and engineering
Located strategically in sugarcane-rich western and central belt of Uttar Pradesh
One of India’s leading sugar & ethanol manufacturers
Efficient, sustainable and complete water/wastewater treatment solutions provider, across the water cycle
Dominant market player in the engineered-to-order turbo gearbox industry
4
TRIVENI AT A GLANCE
61,000
104.5
Tonnes per day Sugarcane crushing capacity
Mega Watt Power Co-generation
LOCATION
18+ world-class facilities including 7 Sugar plants 4 Distillery facilities at three locations
660 1110
Kilo Liter Per Day (KLPD) Alcohol/Distillery capacity*
>10,000
MLD Water & Wastewater treated through Triveni projects
~ ₹ 6,815
Crore Market Capitalization
>10,000
PTB installations across the world
38.8%
Free Float
Note: Market Capitalization and Free Float as on December 31, 2022 * Current distillation capacity at 660 KLPD; announced expansion to 1110 KLPD
5
INDIA FOOTPRINT
~206K Hectare Area under Sugarcane
300K+
Farmer Network
~61,000 Tonnes per day crushing capacity
TEIL PLANTS
TR IV ENI WATER PROJECTS
OUR SERVICE LOCATIONS
TRIVENI POWER TRANSMISSION
Note: Map for representation purpose and not to scale
6
OUR SUGAR & DISTILLERY UNITS' LOCATIONS
Deoband Sugar Co-Generation
Muzaffarnagar Multi-product Molasses Distillery Grain-based Alcohol Production Facility Multi-product Facility
Rani Nangal Sugar
Milak Narayanpur Sugar Incidental Co-Generation Multi-feed Distillery
Khatauli Refined Sugar 2 Co-Generation units
Sabitgarh Refined & Pharma Sugar Incidental Co-Generation Distillery
Ramkola Sugar
Chandanpur Sugar Incidental Co-Generation
Note: Muzaffarnagar can produce high quality Extra Neutral Alcohol (ENA), Rectified Spirit (RS), Specially Denatured Spirit (SDS) from molasses and grain and Ethanol from molasses
7
OUR ESG DRIVEN APPROACH TO BUSINESS
Maintaining ecological balance while ensuring business excellence
01
Best-in-class sustainable processes and solutions across our operations and units
02
03
Fostering Community Development And Social Empowerment
04
Allocation of capital with focus to reduce carbon footprint and promote energy efficiency
05
Harnessing co-products to become raw materials for other products promoting circular economy
06
Highest level of ethical and corporate governance standards
8
STRIVING TO GO BEYOND COMPLIANCE TO ADDRESS RISKS THAT THREATEN THE ENVIRONMENT
Power generation through bagasse, a renewable source of energy & co-product of sugar operations
Utilising molasses for production of fuel ethanol which lowers dependence on fossil fuels and leads to cleaner environment
Reduction in Effluents across air, water and ground through investments in treatment plants, incineration boilers, etc.
Leading water and waste water treatment company with a nationwide presence
Capture CO2 and Potash rich ash from Distillery operations to extract value and limit impact to environment
Promoting R&D in water and wastewater treatment through CII Triveni Institute
Best practices in recycling and promoting conservation of natural resources
In power transmission, supplying to a multitude of industries that use renewable sources of energy
In power transmission, R&D to promote lower losses and increase efficiencies
9
COMMUNITY ENGAGEMENT
Continue to look at ways to make a positive societal difference for the community at large
Farmer relations through continuous communication
Improving soil health through regular tests
Engagement with farmer communities
Customer satisfaction
Data protection and privacy policies and efforts
Employee diversity equity and inclusion
Employee engagement and relations
Health and safety
Respect for human rights and compliance to labour principles
10
SOUND CORPORATE GOVERNANCE IS THE BACKBONE OF OUR ORGANISATION
Diverse Board of Directors with broad-based functional and managerial competencies and experience
Visionary Company leadership
Highest ethical standards
Professionally run organization with highly experienced management team
Accountability, transparency & fairness in business practices
Well-structured Enterprise Risk Management (ERM) policy
11
PERFORMANCE OVER THE YEARS
12
WELL DIVERSIFIED AND GROWING REVENUE BASE
₹ Crore
FY 19-22 Revenue CAGR 14.2%
Rising non-sugar contribution from 13% to 19% during FY 2019-22
Revenue from Operations (Gross)*
Segment-wise Contribution to Revenue from Operations#
4,437
4,703
4,694
3,152
2%
8%
4%
2%
7%
3%
7%
87%
-8%
5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0
2% 6%
3%
9%
86%
-7%
FY 20
11%
87%
-8%
FY 21
3%
6%
4%
16%
81%
-10%
FY 22 Intersegmental Revenue
FY 19
FY 20
FY 21
FY 22
FY 19 Alcohol
Sugar
Power Transmission Water
Others
Revenue growth of 14.2% p.a. during FY 2019-2022 with increasing contribution from other businesses
Note: * Revenue from Operations (Gross) include Excise duty of ` 403.10 crore in FY 22 and ` 29.18 crore in FY 21 on account of Indian Made Indian Liquor (IMIL) sales # Percentages calculated on Net Revenue from Operations excluding aforesaid excise duty
13
PROGRESSIVELY INCREASING PROFITABILITY WITH HEALTHY CONTRIBUTION FROM NON-SUGAR BUSINESSES
₹ Crore
FY 19-22 PBIT CAGR 21.6%
Sugar contribution of 62% in FY 2022
Profit Before Interest and Tax (PBIT)
540
543
627
348
Segment-wise PBIT Contribution
4%
9%
21%
5%
8%
19%
5%
66%
69%
10%
24%
62%
2%
11%
38%
49%
FY 19
FY 20
FY 21
FY 22
FY 19
FY 20
FY 21
Sugar
Alcohol
Power Transmission
FY 22
Water
700
600
500
400
300
200
100
-
PBIT growth of 21.6% p.a. during FY 2019-2022
Note: In FY 19, distillery profitability was higher due to increase in operating days and higher capacity utilisation which resulted in higher production by 80% and corresponding increase in sales volume. The higher profitability was also contributed by lower raw material prices.
14
HEALTHY MARGINS ACROSS BUSINESSES
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
62.0%
11.1%
28.7%
6.2%
2.9%
FY 19
PBIT Margins
12.2%
11.6%
31.5% 28.3%
9.4%
7.8%
FY 20
31.5%
19.6%
10.2%
9.2%
FY 21
14.6%
34.7%
22.4%
11.5%
11.1%
FY 22
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Sugar
Power Transmission
Alcohol
Water
Overall
All businesses delivered margin improvement in FY 22
Note: Margins have been calculated on revenues net of excise duty. In FY 19, distillery profitability was higher due to increase in operating days and higher capacity utilization which resulted in higher production by 80% and corresponding increase in sales volume. The higher profitability was also contributed by lower raw material prices.
15
HIGHEST EVER PROFITABILITY ACHIEVED IN FY 22
FY 22 EBITDA Growth 11.6% y-o-y
EBITDA and EBITDA Margins*
FY 22 PAT Growth 43.9% y-o-y
Profit After Tax (PAT)
11.8%
372.52
700
600
500
400
300
200
100
0
13.1%
12.6%
579.44
588.61
15.3%
656.58
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
335.12
294.61
216.28
424.06
FY 19
FY 20
FY 21
FY 22
FY 19
FY 20
FY 21
FY 22
*EBITDA margins calculated on Revenue net of excise duty
Highest ever EBITDA and PAT in FY 22
₹ Crore
16
STRONG BALANCE SHEET POSITION
Total Debt (Consolidated)
1,725.9
1,558.2
1,568.0
994.0
480.0
FY 19
FY 20
FY 21
FY 22
9M FY 23
Total Consolidated Debt To Equity (x times)
₹ Crore
1.51
1.16
0.64
0.82
0.14
FY 19
FY 20
FY 21
FY 22
9M FY 23
Average Cost of Debt (Standalone)
Long-term credit rating
7.9%
6.3%
6.1%
5.0%
4.8%
ICRA AA- (Stable)
ICRA AA- (Stable)
ICRA AA- (Stable)
ICRA AA (Stable) *
FY 19
FY 20
FY 21
FY 22
9M FY 23
FY 19
FY 20
FY 21
FY 22
Note: Lower debt to equity in 9M FY 23 due to seasonal nature of earnings and substantial exceptional income during the nine months
Note: *Upgraded to ICRA AA- (Positive) on 06.04.21 and further upgraded to ICRA AA (Stable) on 23.11.21
17
CONSISTENT FOCUS ON ENHANCING RETURNS
ROE (%)
27.0%
20.7%
20.4%
24.5%
ROCE (%)
17.9%
18.1%
19.9%
13.1%
FY 19
FY 20
FY 21
FY 22
FY 19
FY 20
FY 21
FY 22
Maximising operational performance across businesses
Enhancing returns consistently over the years
Note: Return Ratios for 9M FY 23 not presented due to seasonal nature of earnings and substantial exceptional income during the nine months
18
ENHANCING SHAREHOLDER RETURNS THROUGH COMBINATION OF BUYBACKS & DIVIDENDS
Buyback of Shares
800
Dividend Payout
Dividend Payout Ratio (%)
₹ Crore
100
65
42.3
32.9
21.8
10%
10%
FY 20
FY 21
FY 23
FY 19
FY 20
FY 21
FY 22
FY 19
FY 20
FY 21
FY 22
78.6
21%
15%
Past history of returning cash through combination of dividend and buybacks Announced buyback of ₹ 800 crore in November 2022 @ ₹ 350 per equity share
Dividend Policy: Payout ratio of the dividend is in the range of 15-25% of the normal business income after deduction of tax
Note: The Company completed buyback of ₹ 100 crores and ₹ 65 crores in August 2019 and August 2020, respectively FY 23 proposed buyback is subject to approvals
19
SHAREHOLDING PATTERN
61.23%
5.28%
7.52%
18.94%
3.73%
1.83%
1.47%
Promoter Group
Resident Individuals
Others
Foreign Portfolio Investors
Mutual Funds + AIF
Corporate Bodies
NRI
Note: For the quarter ending December 31, 2022. Others comprise of Clearing members, HUF, Trust, IEPF, etc.
20
RESULTS REVIEW Q3/9M FY 23
21
KEY HIGHLIGHTS OF 9M FY 23 RESULTS
Revenue from Operations (Net of excise duty) at ₹4034.28 crore, an increase of 25.3%
Profit before exceptional items and tax at ₹ 311.87 crore
Profit after Tax at ₹ 1601.49 crore
The Board of Directors approved capex of ₹ 90 crore for Sugar business and ₹ 100 crore for Power Transmission business
22
FINANCIAL HIGHLIGHTS Q3 / 9M FY 23
₹ Crore
Q3 FY 23
Q3 FY 22
Change (%) 9M FY 23 9M FY 22 Change (%)
Revenue from Operations (Gross)
1,658.7
1,235.4
Revenue from Operations (Net of excise duty)
1,462.7
1,115.7
EBITDA
EBITDA Margin
Share of income from Associates
230.6
209.8
16%
-
19%
7.8
34.3
31.1
9.9
4,491.8
3,501.9
4,034.3
3,220.9
28.3
25.3
411.5
478.9
-14.1
10%
16.33
15%
51.8
Profit Before Tax (PBT) Before Exceptional Items
198.7
185.0
7.4
311.9
430.3
Exceptional Items - income/(expense)
Profit Before Tax (PBT) After Exceptional Items
Profit After Tax (PAT)
Other Comprehensive Income (Net of Tax)
-
198.7
147.3
0.2
-
185.0
130.1
0.8
Total Comprehensive Income
147.5
130.9
EPS (not annualized) (₹/share)
6.09
5.39
1,401.20
-
1,713.1
430.3
1,601.5
314.9
(1.2)
5.2
1,600.2
320.1
66.24
13.03
7.4
13.2
12.7
13.0
-68.5
-27.5
298.1
408.6
399.9
408.4
23
SUGAR: PERFORMANCE IN SUGAR SEASON
SUGAR
Sugarcane Crushed (Million Tonnes)
Sugar Production (Tonnes)
Recovery (%)
+25.3%
3.12
2.49
+16.5%
251369
292888
SS 2021-22
SS 2022-23
SS 2021-22
SS 2022-23
10.08
9.38
SS 2021-22
SS 2022-23
Net Recovery
Materially higher crush in SS 2022-23 owing to the modernisation, debottlenecking at three sugar facilities
24
SUGAR: HIGHER DISPATCHES AND REALISATIONS
SUGAR
Domestic Sugar Dispatches (Tonnes)
Domestic Realization price (₹/MT)
+16.5%
40409
+15.1%
222247
222247
255837
193791
62046
648206
38066
610140
755272
62046
693226
36452
36111
40409
35579
25785
35028
3Q FY 22
3Q FY 23
9M FY 22
9M FY 23
3Q FY 22
3Q FY 23 Domestic Realization price (₹/MT)
9M FY22
9M FY23
Domestic
Exports
Total
Export Realization price (excl. subsidy) (₹/MT)
Higher sales volumes and realizations
Achieved sugar exports of 135034 tonnes (including sale of quota for 72988 tonnes) during Q3 FY 23 out of total export quota of 204868 tonnes
25
SUGAR: HIGHER REVENUES; PROFITABILITY IMPACTED IN Q3 / 9M FY 23
SUGAR
REVENUE
21.5%
3,191.03
2,627.04
21.4%
931.86
1,131.64
₹ Crore
PBIT
264.07
140.82
113.69
141.94
Q3 FY 22 Q3 FY 23
9M FY 22 9M FY 23
Q3 FY 22 Q3 FY 23
9M FY 22 9M FY 23
Revenues boosted by higher sales volumes and sugar realisations
Profitability in sugar business is lower as the cost of sugar sold pertaining to the previous season includes the impact of sugarcane price increase for the Season 2021-22 and higher cost of sugar produced in the current season due to transitory lower recoveries
9M FY 22 included export subsidy of ₹ 57 crore relating to the previous period
The sugar inventory as on December 31, 2022 was 23.93 lakh quintals, which is valued at around ₹ 34.4/kg
26
HIGHER ALCOHOL REALISATIONS AND SALES IN Q3/9M FY 23
ALCOHOL
Alcohol Production (KL)
Alcohol Sales (KL)
+87.2%
24713
46275
+66.9%
131618
78868
+60.0%
26638
42615
+39.8%
127226
91019
Q3 FY 22
Q3 FY 23
9M FY 22
9M FY 23
Q3 FY 22
Q3 FY 23
9M FY 22
9M FY 23
Avg. Realisation (₹/litre)
56.6
57.5
55.2
53.3
Q3 FY 22
Q3 FY 23
9M FY 22
9M FY 23
Additional capacity commissioned in 9M FY 23 leading to higher volumes
Ethanol produced from B-heavy constitutes 57% and 72% of the sales volume in the current quarter and nine-month period as against 88% and 80% last year
Sale of ethanol produced from grain accounted for 33% and 20% of total sales volumes in the current quarter and nine-month period
Note: 3Q/9M realisation includes relief announced by Oil Marketing Companies from June 1, 2022
27
ADDITIONAL DISTILLATION CAPACITIES ADDED IN 9M FY 23
ALCOHOL
NET REVENUE*
+61.0%
816.16
506.88
+82.9%
285.58
156.14
39.6%
35.91
50.14
₹ Crore
PBIT
23.9%
147.16
118.79
Q3 FY 22 Q3 FY 23
9M FY 22 9M FY 23
Q3 FY 22 Q3 FY 23
9M FY 22 9M FY 23
* Revenue net of excise duty
Additional capacities commissioned in 9M FY 23 resulting in increased sales volumes
Aggregate distillation capacity 660 KLPD
The profitability has been impacted due to increased transfer price of B-heavy molasses, initial stabilization
period of distilleries and relatively lower margin with grain as feedstock.
28
POWER TRANSMISSION CONTINUES ITS GROWTH PATH
POWER TRANSMISSION
REVENUE
+28.8%
152.07
+70.9%
118.04
60.52
35.41
PBIT
+27.1%
50.91
40.05
+91.6%
21.04
10.98
Q3 FY 22 Q3 FY 23
9M FY 22 9M FY 23
Q3 FY 22 Q3 FY 23
9M FY 22 9M FY 23
Domestic market showing encouraging signs due to various Government policies and overall economic growth
Following the expiration of High Speed Licence Agreement with Lufkin Gears LLC in January 2023, the Company will pursue the high-speed high-power segment independently, and is confident of enhancing market share in its identified target markets.
₹ Crore
29
POWER TRANSMISSION CLOSING ORDER BOOK UP 23% y-o-y
POWER TRANSMISSION
₹ Crore
Order Booking
+9.4%
Closing Order Book
+22.8%
-10.1%
88.51
79.59
176.78
193.37
213.88
262.74
Q3 FY 22 Q3 FY 23
9M FY 22 9M FY 23
Q3 FY 22
Q3 FY 23
Some challenges especially in export markets in 9M FY 23, however with good momentum in order booking, expect these to be resolved in the coming quarters
Outstanding order book as on December 31, 2022 stood at ₹ 262.74 crore including long duration orders of ₹ 120.62 crore
30
CONTINUED IMPROVEMENT IN WATER BUSINESS REVENUES
WATER
₹ Crore
REVENUE
+40.7%
PBIT
-33.4%
237.37
-36.0%
22.2
+34.4%
168.72
103.86
77.3
12.1
7.74
14.76
Q3 FY 22 Q3 FY 23
9M FY 22 9M FY 23
Q3 FY 22 Q3 FY 23
9M FY 22 9M FY 23
Water business revenues improved in Q3 FY 23
The orders received in 9M FY 23 stood at ₹ 190.45 crore excluding O&M orders
Note: These results are based on consolidated results including wholly owned SPV executing Mathura Project awarded by National Mission of Clean Ganga (NMCG) under Namami Gange Programme and PALI ZLD Pvt. Ltd.
31
WATER BUSINESS ORDER BOOKING REMAINS ROBUST
WATER
₹ Crore
Closing Order Book**
-5.7%
1503.32
1594.5
Q3 FY 22
Q3 FY 23
Expecting robust order booking in the coming quarters and is well placed in certain bids being evaluated both domestically and internationally
Long duration O&M orders in hand are Q3 FY 23: ₹ 930 crore
**Including long duration orders for Operations & Maintenance (O&M)
32
MARKET UPDATES
33
GLOBAL & DOMESTIC SUGAR OUTLOOK
• Recent industry reports forecast for global sugar balance for SS 2022-23 is a surplus of 3 million tonnes, owing to a bigger crop in CS Brazil and Thailand.
• Central South Brazil is expected to produce ~36 million tonnes of sugar in the next season as against ~33-34 million tonnes in the previous season. Thailand is expected to produce 11.6 million tonnes of sugar in 2022-23, up from 10.34 million tonnes in previous season.
• Triveni estimates net sugar production in SS 2022-23 at around 35 million tonnes, which is lower than street estimates of ~36 million tonnes.
• With an opening balance as on October 1, 2022 of around 5.5 million tonnes, estimated sugar production for SS 2022-23 of around 35 million tonnes and estimated domestic sales of around 27.5 million tonnes, around 7 million tonnes of sugar needs to be exported to maintain the closing stock at similar levels.
Source:
34
INDIA SUGAR BALANCE SHEET: STABLE CLOSING STOCKS OF ~6 MT EXPECTED FOR SUGAR SEASON (SS) 2022-23
+2.0 million tonnes*
+3.4 million tonnes*
+4.5 million tonnes*
India Sugar Balance Sheet (million tonnes)
35.8
35.0
31.2
26.6
27.3
27.5
10.7
8.2
5.5
11.1
7.2
7.0
8.2
5.5
6.0
Opening Stock as on 1st Oct
Production
Internal Consumption
Exports
Closing Stock on 30th Sep
2020-21
2021-22
2022-23 (E)
40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 -
Source: Triveni Estimates *sugar diversion to ethanol production
Closing inventories expected ~6 million tonnes in SS 2022-23
35
POWER TRANSMISSION BUSINESS OUTLOOK
• Outlook for the domestic product segment within high speed gears is extremely promising as industrial CapEx in sectors like cement, energy, distillery, steel is growing and have been supported by policies and robust economic growth
•
In the aftermarket business, the Company is focused on expanding its addressable market and market share looking both at domestic and identified target markets
• The Government’s ‘Make in India’ initiative has led to new
opportunities for diverse engineering products and the Power transmission business is actively participating in many of these indigenous projects
•
In the Defence segment, expect long-term growth in the segment combined with the machining infrastructure that is likely to show growth over the coming years
36
WATER & WASTEWATER DEVELOPMENTS AND THE WAY FORWARD
• Expect improvement in order booking in coming quarters with
many projects coming under conclusion
• Expanding our activities in overseas markets after achieving
success in Maldives and Bangladesh
• Domestic market opportunities are increasing in Recycle & Reuse
of wastewater and water business is equipped to target this market
• Municipal business opportunities are looking attractive in many key states such as Karnataka, UP, Punjab, Delhi, Telangana, and Maharashtra
• Market is witnessing increasingly more & more projects under
Public Private Partnership (PPP) – Hybrid Annuity Model (HAM) and the Company would widely participate in those
37
INVESTORS CONTACT
Surabhi Chandna Triveni Engineering & Industries Ltd. Tel. +91 120 430 8000 Fax : +91 120 431 1010 ir@trivenigroup.com www.trivenigroup.com
Gavin Desa/ Rishab Brar Citigate Dewe Rogerson Tel: +91 22 66451237/1235 gavin@cdr-india.com / rishab@cdr-india.com
38
SAFE HARBOUR/LEGAL DISCLAIMER
Some of the statements in this presentation that are not historical facts are forward looking statements. These forward-looking statements include our financial and growth projections as well as statements concerning our plans, strategies, intentions and beliefs concerning our business and the markets in which we operate.
These statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements. These risks include, but are not limited to, the level of market demand for our services, the highly-competitive market for the types of services that we offer, market conditions that could cause our customers to reduce their spending for our services, our ability to create, acquire and build new businesses and to grow our existing businesses, our ability to attract and retain qualified personnel, currency fluctuations and market conditions in India and elsewhere around the world, and other risks not specifically mentioned herein but those that are common to industry.
Further, this presentation may make references to reports and publications available in the public domain. Triveni Engineering & Industries Ltd. makes no representation as to their accuracy or that the company subscribes to those views / findings.
39
THANK YOU