125% Dividend: Record Date On Friday, September 6, 2024; Buy The Sugar Stock For The Sweet Payout?

One of the largest manufacturers of integrated sugar, engineered-to-order turbo gearboxes, and water and wastewater management systems in the nation is Triveni Engineering & Industries Ltd. With seven cutting-edge, FSSC 22000 recognised sugar-producing facilities spread across the state of Uttar Pradesh, Triveni is one of the nation's largest integrated sugar producers.

Triveni Engineering & Industries Dividend

The Board of Directors "Recommended a final dividend of 125% i.e. Rs.1.25 per fully paid-up equity share of the face value of Re. 1/- each for the financial year ended March 31, 2024, subject to approval of the shareholders at the ensuing Annual General Meeting ('AGM'), and fixed Friday, September 6, 2024 as the Record Date for purpose of ascertaining the entitlement of Members/Beneficial Owners to the said final dividend. The final dividend, if declared at the AGM, shall be paid to the shareholders, subject to deduction of tax at source, within thirty days from the date of AGM scheduled on Friday, September 13, 2024," said the company in a stock exchange filing.

"The Board of Directors of the Company has recommended a final dividend of 125% (Rs 1.25 per equity share of the face value of Rs 1 each) for the financial year 2023-24, which is subject to the shareholder's approval in the ensuing annual general meeting. During the year, the Company had paid an interim dividend of 225% (Rs 2.25 per equity share of the face value of Rs 1 each) and a special dividend of 225% (Rs 2.25 per equity share of the face value of Rs 1 each)," Triveni Engineering & Industries further informed to stock exchanges.

Triveni Engineering & Industries Financials

The company's revenue from operations on a stand-alone basis dropped 17.73% to Rs. 1,301.53 crore in the March 2024 quarter from Rs. 1,581.97 crore in the same quarter of 2023. In Q4FY24, the net profit was Rs. 159.82 crore, a 15.7% drop from Rs. 189.58 crore in Q4FY23. EBITDA dropped 8.46% from Rs. 281.62 crore in the corresponding quarter of FY23 to Rs. 257.80 crore in the quarter under review.

Net profit for the entire year plunged by 77.95% to Rs 395.16 crore in the fiscal year that ended in March 2024 from Rs 1791.80 crore in the fiscal year that ended in March 2023. Sales fell 7.06 per cent to Rs 5220.09 crore in FY24 from Rs 5616.84 crore in FY23.

Mr. Dhruv M. Sawhney, Chairman and Managing Director, Triveni Engineering & Industries Ltd, said "The year gone by presented several operating challenges to the Company especially in the Sugar and Alcohol businesses while our Power Transmission business delivered another year of stellar performance. It is heartening to note that the Company has reported satisfactory results despite such challenges. The Company is hopeful of an improved performance in the coming year through a combination of policy decisions, and favourable macro environment while addressing challenges with agility. The sugarcane crush in the just concluded Sugar Season (SS) 2023-24 was 11% lower to 8.26 million tonnes, well short of our initial expectations. The major decline in crush took place in four sugar units: Deoband in Western UP and Chandanpur, Rani Nangal and Milak Narayanpur in the Central UP."

"The chief reasons are the climatic factors, such as, heavy rainfall and water logging in certain regions, absence of sunshine for long spell in winter and spread of red rot disease, which reduced the yields considerably, mainly in the plant cane and higher diversion to kolhus/crushers. Such trend of lower sugarcane availability was witnessed across Central & Western UP regions. The sugarcane development teams have chalked out multi-pronged strategy to contain the damage by uprooting the diseased crop to limit the spread and to carry out comprehensive varietal substitution programme to reduce the proportion of vulnerable variety Co238, especially in low-lying/ water-logging prone areas and to substitute it by other high sucrose and high yield varieties. We hope to substantially improve our crush next season," he added.

"Sugar prices have remained at healthy levels both in FY 24 and more recently. We expect these trends to continue and believe that a continually increasing portfolio of refined sugar and pharmaceutical-grade sugar production, which now stands at 70% of overall sugar production, augurs well for sugar realisations for the Company. We continue to make judicious investment in our facilities to enhance crush rate, sugar quality and efficiencies. In our Alcohol business, the Company faced several feedstock challenges during the year that led to disruption in planned production, such as abrupt stoppage of Surplus Rice by Food Corporation of India (FCI rice), restrictions with respect to usage of B-heavy molasses, introduction of Maize as feedstock, price volatility in feedstocks, etc. Accordingly, sugar operations were carried largely with C-heavy molasses as compared to Bheavy molasses in the previous year and the distillery operations were largely based on maize instead of FCI rice earlier. This has led to lower operating capacities and hence lower production and further, the margins on maize operations were relatively lower despite price corrections. We are hopeful the Government will address the feedstock and profitability challenges in FY 25 as it remains committed to Ethanol Blended Petrol (EBP) targets of 20% by 2025-26," Dhruv M. Sawhney said.

"Our long-term strategy is to grow the Alcohol business by being an active partner in India's EBP programme and self-reliance journey. To this end, we recently commissioned a 200 KLPD multi-feed distillery at our sugar unit at Rani Nangal which has resulted in an aggregate distillation capacity to 860 KLPD for the Company. In our Engineering businesses, the Power Transmission business reported remarkable performance with new milestones achieved with respect to revenues, profitability and order booking in FY 24. The year also marked a period of extensive international customer outreach and continued investments in R&D and infrastructure aimed at enhancing the business' market share to capitalize on the global opportunity landscape," he commented.

"Coupled with the strides made in Defence, the Power Transmission business is on a sustained growth path. In the Water business, the year went by was muted in terms of market activity and finalization of orders. We expect this to improve in the coming years and the business is well-placed in terms of bids and credentials. The long-term prospects for water and wastewater treatment solutions, both in India and in International markets, remain intact leading to a positive outlook on this business," the chairman stated.

Triveni Engineering & Industries Share Price Target

Mandar Bhojane - Equity Research Analyst at Choice Broking said, "TRIVENI, currently priced at Rs 354, has recently been trading in range between 342 and 370, indicating a sideways trend. If the price closes above the 360 level, it may further rise to levels around 380 and 400. On the flip side, 340 acts as a support level."

"The Relative Strength Index (RSI) stands at 52, signaling a sideways momentum. The price is also trading above the 20-day exponential moving average (EMA), which acts as a support level. To effectively manage risk, it is advisable to set a stop-loss (SL) at Rs 340 to safeguard the investment against unexpected market reversals. A prudent strategy involves considering buying opportunities on market dips at levels around Rs 347," the analyst further added.

Disclaimer

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