Summary
Triveni Engineering & Industries Limited - Q3 FY26 Earnings Call Summary Monday, February 02, 2026 4:00 PM IST
Event Participants
Executives 6 Geeta Bhalla (Group VP & Company Secretary), Rajiv Rajpal (CEO, Power Transmission), Rishab Barar (CDR India), Sameer Sinha (CEO, Sugar Business), Suresh Taneja (Group CFO), Tarun Sawhney (Vice Chairman and Managing Director)
Analysts 4 Abhisar Jain (Monarch AIF), Nisha Garg (Samco Mutual Fund), Rajesh Majumdar (361 Capital), Vishal Prasad (VP Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹4,782.5 crores | +17.8% YoY; Driven by higher sales in Sugar/Distillery segments and improved sugar realizations. |
| Profit Before Tax (PBT) | ₹102.8 crores | +78.5% YoY; Significant improvement despite a ₹22.4 crore exceptional cost for new labor codes. |
| Profit After Tax (PAT) | ₹77.8 crores | +82.6% YoY; Attributed to strong operational turnarounds in the Distillery and Sugar segments. |
| Consolidated Gross Debt | ₹1,073 crores | Increased from ₹981 crores YoY; Average cost of funds improved to 6.1% for Q3. |
| Sugar Closing Stock | 30.7 lakh quintals | Valued at >₹39/kg vs ₹38.8/kg YoY; Refined sugar realizations currently exceed ₹41.50/kg. |
| Power Transmission Order Book | ₹409 crores | +8% YoY; Includes a recent ₹45 crore defense order; January showed a strong rebound in bookings. |
| Water Business Order Book | ₹1,598 crores | Includes ~₹1,100 crores of long-term O&M contracts; Domestic climate noted as “muted” during Q3. |
Geographic & Segment Commentary
- Sugar: Revenues increased 12% in Q3 supported by 6% higher price realizations and 8% volume growth. Management notes a production downward revision in Maharashtra and Karnataka (total ~1.5M tonnes lower), which is expected to support more robust pricing in the coming quarters.
- Alcohol/Distillery: Sales volumes rose 27% due to full operations of new grain-based capacities. Profitability improved significantly on the back of lower maize procurement costs (delivered at ~₹20/kg) and an ethanol blending percentage reaching nearly 20% industry-wide.
- Power Transmission: PBT margins improved by 90 bps YoY due to better product mix and cost optimization. While Q3 order conversion was sluggish due to global geopolitical uncertainties, export inquiries rose 75% YoY, particularly from the Middle East and the compressor/pump segments.
- Defense: The new multi-modal defense facility in Mysuru commenced manufacturing in December 2025. The company is currently bidding for high-value naval programs including gas turbine propulsion, fin stabilizers, and shafting.
Company-Specific & Strategic Commentary
- Corporate Restructuring: The demerger of the Power Transmission business and merger of Sir Shadi Lal Enterprises (SSEL) is on track for completion in Q1 2026 following NCLT hearings in February.
- Digital Transformation: Implementation of SAP S/4HANA, a new CRM solution, and “smart factory” initiatives are underway in the Power Transmission segment to enhance standalone operational efficiency.
- Defense Expansion: SSEL operates as a new unit where relationship management with 350,000 farmers is being prioritized to improve yields and discourage detrimental farming practices like late urea dosing.
- Product Localization: Partnered with Rolls-Royce for 4-MW marine gas turbine generators; successful indigenization would mark a first for the Indian Navy’s technical solutions.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Closing Sugar Stock | ~6 million tonnes (FY26-end) | Reduced from 8M tonnes due to lower production in Western/Southern India; bodes well for pricing. |
| Sugar MSP | Lower ₹37/kg bracket (Expected) | Management believes this is insufficient given rising cane costs but expects GOI action soon. |
| Ethanol Feedstock | Shift to Rice in Q3/Q4 | OMC Cycle 2 tenders expected to focus heavily on FCI rice-based ethanol over maize/molasses. |
| Power Transmission | Strong Q4 Rebound | January bookings already show recovery from Q3 “momentary lapse” in decision-making. |
Risks & Constraints
| Risk | Context |
|---|---|
| Feedstock Availability | OMC Cycle 2 tenders may restrict the use of B-heavy molasses and maize in favor of FCI rice, potentially impacting margins. |
| Global Sugar Prices | Near historic lows in international markets (NY March at 14.7 cents) may hinder the full 1 million tonne export target. |
| Operational Stability | Subsidiary SSEL faced two significant breakdowns and “white fly” pest issues impacting recovery; expected to remain loss-making for the current year. |
| Geopolitical Factors | Global uncertainty led to delayed decision-making by OEMs in the Power Transmission segment during Q3. |
Q&A Highlights
Marine Gas Turbine Partnership
- Question: Update on the 4-MW Marine Gas Turbine partnership with Rolls-Royce? (Vishal Prasad)
- Answer: Currently at the architectural stage with the Indian Navy. It represents a major indigenization opportunity if the Navy opts for gas turbine propulsion over diesel. (Tarun Sawhney)
Export Competitiveness
- Question: How does Triveni compare to European turbo gear suppliers on price and delivery? (Vishal Prasad)
- Answer: Manufacturing costs are estimated to be 25%-30% lower than European peers. Delivery timelines are 6-8 months vs 12+ months for European competitors. (Tarun Sawhney)
Distillery Economics
- Question: What are the current unit economics for maize vs other feedstocks? (Shailesh Kanani)
- Answer: Maize currently offers robust double-digit contributions, higher than C-heavy molasses. Prices are flat at ~₹20/kg since November, with further softness expected when the Bihar crop arrives in April. (Tarun Sawhney)
Sugar Recovery & Yields
- Question: Why did sugar recovery improve so significantly to 10.5%? (Nisha Garg)
- Answer: Healthier, disease-free cane and a shift back to C-heavy molasses (normalizing the base). However, yields in Central/Eastern UP have been lower due to agroclimatic reasons. (Tarun Sawhney)
Defense Strategy
- Question: What is the CAPEX and ramp-up plan for the new defense facility? (Abhisar Jain)
- Answer: Approved CAPEX is ~₹100 crores. The facility is currently operating Bay 1 of 4. Revenue will cascade as naval contracts for shafting and gearboxes are fulfilled over the next 3-5 years. (Tarun Sawhney)
Key Takeaway
Triveni Engineering delivered a strong Q3 FY26 with an 18% revenue increase and an 83% jump in PAT, driven by a sharp turnaround in the Distillery segment and stable sugar realizations despite a record ₹300/MT hike in sugarcane prices. Strategically, the company is pivoting toward higher-margin Engineering and Defense sectors, with its new Mysuru facility operational and the demerger of the Power Transmission business nearing completion to unlock shareholder value. While the Power Transmission segment saw a temporary Q3 lull in order conversion due to global macro-uncertainty, a significant rebound in January 2026 bookings suggests a robust Q4. Looking ahead, a projected decline in national sugar ending stocks to 6 million tonnes and the potential for a sugar MSP hike provide a positive tailwind for realizations, even as the company navigates shifting government priorities in ethanol feedstock toward FCI rice. Management remains confident that the separation of the engineering and sugar entities will drive focused operational excellence.
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