Buy This Mid-Cap Electric Equipment Stock For Potential Upside Of More Than 23%: Sharekhan

Sharekhan has given a buy call on a mid-cap stock from the electric equipment sector. The brokerage firm is bullish on Triveni Turbine Ltd and has a "Buy" rating with a target price of Rs. 280.

As per the chart, the stock is in a clear uptrend and is going up with strong momentum and good volume. The stock price is currently at its all-time highs, and the latest report of Sharekhan suggests that it has the potential to move more than 23% to the upside.

Here is a brief breakdown of the latest report of Sharekhan on Triveni Turbines Ltd.

Outlook of Triveni Turbines Ltd

Triveni Turbine Ltd.'s main line of business is the production and distribution of tools and solutions for power generation. Since the 1970s, it has been a division of Triveni Engineering & Industries Ltd, and it was separated into an independent entity as of October 2010.

Triveni Turbines Ltd is a mid-cap company with over Rs. 7210 Crores market capitalization. The stock's current market price is Rs. 226, trading near its all-time highs. The stock has been surging rapidly for the past few weeks, and in recent trading sessions, it has broken major resistance in a larger time frame.

Sector Outlook of Triveni Turbines

According to the report of Sharekhan, "In 2021, the Indian steam turbine market for more than 30 MW range grew 137% (in MW) over 2020. Demand for heat and power from the industrial segment was the key factor contributing to the rebound in the steam turbine market to 2019 levels. With the manufacturing sector on a growth trajectory, and industries like sugar, distillery, steel, cement, pulp and paper, and chemicals expected to increase production, demand for steam turbines is expected to remain robust in the future."

Valuation Outlook of Triveni Turbines Ltd

"Triveni Turbine Limited (TTL) is poised to expand its addressable market base through a foray into energy-efficient API turbines for the oil and gas industry, pursuing 30-100 MW opportunities and leveraging its expertise in the growing renewable energy market. Management is confident of achieving strong order inflows in FY2023 and expects ~35% revenue growth in the next couple of years. The company is expanding capacity and gearing up the supply chain to prepare for high growth over the next two years. TTL continues to be the leader in the 0-30 MW steam turbine market and garners industry-leading margins." says the latest report of Sharekhan.

Buy Call Of Sharekhan On Triveni Turbines Ltd

According to the latest report of Sharekhan, "TTL is well poised for a high-growth trajectory, led by strong order inflows and promising inquiry pipeline in both 0-30 MW and 30-100 MW segments in domestic and international markets. The company's entry into the high-margin API segment, a higher share of export orders, and aftermarket segment orders would aid in margin improvement. The company is undertaking capital expansion and gearing up its supply chain and sales network to drive future growth. The stock is trading at ~28x its September FY2024E EPS, which we believe offers room for an upside, considering strong Revenue/PAT CAGR of ~29%/34% over FY2022-FY2025E. Further, nil debt, healthy cash balance, and strong return ratios give us comfort. Hence, we retain our Buy rating on TTL with a revised price target (PT) of Rs. 280."

Key Risk On Buy Call Of Sharekhan

As mentioned in the report of Sharekhan, "Slowdown in domestic macroeconomic environment or weakness in international markets can affect the business outlook and earnings growth" can be a risk for taking the buy call.