Triveni Engineering & Industries Limited

Triveni Engineering & Industries reported a robust H1 FY26, with revenues from operations increasing by 18.4% to just over ₹3,300 crore. Profit Before Tax (PBT) for H1 stood at ₹32 crore, a significant improvement from ₹11.5 crore in the prior year, while Profit After Tax (PAT) reached ₹23.5 crore compared to ₹8.6 crore. Q2 FY26 alone saw a 14% increase in net turnover, driven by healthy double-digit growth across both the Sugar and Engineering business segments. The overall cost of funds for Q2 FY26 was 6.4%, a 30 basis point reduction from 6.7% in the previous corresponding period.

The Sugar business's H1 revenues increased by 22%, supported by a 14% increase in dispatches and 4% in realisations. Q2, being an off-season period, saw no manufacturing operations, with expenses expensed out. The company's inventory as of September 30, 2025, stood at 16.9 lakh quintals, valued at ₹37.4 per kilo, a reduction from 20.6 lakh quintals at ₹35 per kilo a year prior. The UP government's recent ₹30 increase in SAP for Sugar Season 2025-2026 puts pressure on profitability, necessitating an urgent review of the Minimum Support Price (MSP) by the Government of India. The company anticipates UP sugar production to increase by 3.5% to 9.6 million tonnes for the 2025-2026 season.

Alcohol sales in Q2 were down by 6% due to supply disruptions from an export fee notification, leading to higher closing stock of 167 lakh litres. However, this stock has largely been evacuated in the last 5 weeks. The average realization price in Q2 was lower due to an increased share of ethanol produced from FCI Rice. Profitability significantly improved due to correction in input prices, particularly maize, which was procured at approximately ₹22.5 per kilo in April-May from Bihar, and currently at ₹20 per kilo from Madhya Pradesh. Management estimates maize-based ethanol EBITDA at ₹11-12 per litre, B-heavy molasses at ₹9-10 per litre, and C-heavy molasses at north of ₹6 per litre.

The Power Transmission Business had a healthy quarter, securing new orders and maintaining strong visibility. Despite a subdued Q2 due to global factors, the business achieved a PBIT margin of 36% for H1 FY26, driven by a good product mix and strong cost optimization. The company successfully acquired 100% stake in Triveni Power Transmission GmbH, a Swiss company, expanding its global footprint. Triveni also registered 9 new OEM customers globally and is focusing on diversifying its product scope beyond steam turbines to compressors and gas turbines, with significant work on design and development for cost improvements and reduced manufacturing time for standardized models.

The Water Business secured an order booking of ₹1,520 crore, including ₹1,092 crore for O&M contracts over a longer period. The company is actively tendering for new projects in recycle, reuse, Zero Liquid Discharge, and EPC/HAM models, with increasing traction in the water market. On the digital front, Triveni is undergoing a massive ERP migration, expected to be completed by Q4 FY26, which will enhance data utilization. The Power Transmission Business is also implementing CRM, digital factory, and digital twin initiatives to improve customer stickiness and manufacturing control.

The company's gross debt increased to ₹505 crore (standalone) as of September 30, 2025, from ₹383 crore a year ago, with standalone term loans of ₹310 crore, including approximately ₹160 crore with interest subvention. Consolidated gross debt stood at ₹753 crore, up from ₹536 crore on September 30, 2024. The overall cost of funds for Q2 FY26 was 6.4%, a 30 basis point reduction from 6.7% in the previous corresponding period. The proposed scheme of arrangement, involving amalgamation with SSEL and demerger of the Power Transmission business, has received stock exchange approvals, with NCLT stakeholder meetings scheduled for late November and early December, aiming for culmination in Q4 FY26.