Triveni Engineering & Industries Q1 FY27 earnings call

Triveni Engineering & Industries Limited reported a 2% year-on-year revenue growth to ₹1,581 crores for Q1 FY27. EBITDA increased by 6% year-on-year, and the company achieved a Profit Before Tax (PBT) of ₹5 crores, a significant improvement from a loss of ₹9 crores in Q1 FY26. This positive shift was primarily driven by enhanced profitability in the sugar and distillery businesses, alongside a notable reduction in the consolidated average cost of funds by 70 basis points to 6.8%.

The sugar business delivered stable profitability in Q1 FY27, with segment revenue rising 6% year-on-year to ₹1,235 crores and PBIT increasing 82% to ₹14 crores. Domestic dispatches grew by 7%, and average realization improved by 3%. Despite a 9% lower sugarcane crush of 8.25 million metric tonnes for the 2025-2026 season, gross recovery improved by 26 basis points to 11.1% due to intensive cane development. Current sugar prices are approximately ₹4,600 per quintal for refined sugar and ₹4,525 per quintal for sulphitation sugar, indicating a reasonable increase.

The alcohol and distillery business continued its robust turnaround, with PBIT improving 32% to ₹31 crores. This was achieved despite a 12% year-on-year decline in production to 57,488 kilolitres and a 19% drop in sales volume to 50,483 kilolitres, leading to a 13% revenue decrease to ₹373 crores. The improved profitability was attributed to lower maize procurement costs, better DDGS realisations, and ongoing cost optimization efforts. Grain-based ethanol now constitutes 61% of alcohol sales, up from 58% in the previous corresponding quarter.

The water business experienced a 21% year-on-year revenue decline to ₹43 crores, resulting in a PBIT of ₹2 crores. This was primarily due to slower execution of EPC jobs in Prayagraj and Vadodara. However, the company secured ₹9 crores in new orders during the quarter and maintains a healthy closing order book of ₹1,472 crores, which includes ₹1,065 crores from longer-duration O&M contracts. Management noted substantial bids exceeding ₹300 crores during the quarter, with expectations of securing some as L1.

Triveni Engineering & Industries Limited successfully reduced its standalone gross debt to ₹1,238 crores as of June 30, 2026, down from ₹1,603 crores in the previous corresponding year. This debt comprised ₹376 crores in term loans and ₹862 crores in working capital. The consolidated average cost of funds decreased significantly by 70 basis points to 6.8% during the quarter, compared to 7.5% in the previous corresponding quarter, reflecting effective debt management in a challenging environment.

Fiscal 2027 marks a new phase for the company with the de-merger of its power transmission business, which became effective from May 19, 2026, and vested in Triveni Power Transmission Limited (TPTL) from April 1, 2026. TPTL contributed ₹4.35 crores as a share of profit to Triveni's consolidated accounts. The listing process for TPTL is in its final phase, with share allotment completed on July 22, 2026, and the company expects the listing to be completed within approximately four to six weeks, subject to regulatory approvals.

India successfully achieved 20% ethanol blending in ESY 2025-2026, procuring 717 crore litres, with grain-based ethanol dominating. Despite ongoing court cases that have stayed alterations to the existing ethanol allocation framework, the Attorney General has indicated a request for 100 crore litres to be allocated, with a hearing expected soon. Management anticipates total ethanol procurement for the next year to be around 1,300 crore litres, with a projected 3:1 grain-to-sugary feedstock ratio, emphasizing the long-term benefits of the program.