Sharekhan Sees 34% Gains In This Sugar Stock, Suggests Buy, Gained Over 650% In 3 Years

Broking firm Sharekhan has assigned a "Buy" on Triveni Engineering & Industries Ltd. (TEIL) with a target price of Rs 340 apiece. It claims a potential upside of up to 35% from its current level if the stock is purchased at the current market price. TEIL is a midcap company that operates in the sugar sector. It is predominantly an integrated sugar manufacturing company, which is also involved in manufacturing high-speed gears and project implementation in the fields of water and waste-water treatment and pollution control. It has a market capitalisation of Rs 5,547.97 crore.

TEIL's Stock Performance, Returns, and 52-Week Low and High

The shares of TEIL last traded at Rs 253.45 apiece, down 4.88% compared to the previous close of Rs 266.45 apiece. It traded the 52 week high on 19 April 2022 at Rs 374.50 apiece, and 52 week low on 20 June 2022 at Rs 211.05 apiece, respectively.

In the past 1 year, the stock has continuously fallen, giving over 18% negative return. In the past week, it has fallen 6.73% and in the past 1 month, it has fallen 7.43%. However, it has given a robust 666.87% positive return in the past 3 years. In the past 5 years, it has given 502.73% positive return.

Sharekhan Maintain Buy with an unchanged PT of Rs. 340/share

According to Sharekhan, TEIL is well poised to achieve strong double-digit earnings growth over FY2022-FY2025 with higher capacity utilisation in the expanded distillery facility, improved production for the sugar business, and better order book in engineering. The company has utilised large part of cash generated from stake sale in Triveni Turbine by utilising it for a Rs. 1600-crore buyback. It has maintained its thrust on its key businesses through sustained investment in operating efficiency and capacity expansion. "With expected higher contribution from distillery business, the return ratios will consistently improve in the coming years. Post correction of ~28% from its high, the stock is trading at attractive valuation of 20.1x/14.8x/11.2x its FY2023E/FY2024E/FY2025E EPS. We maintain our Buy recommendation on the stock with an unchanged price target (PT) of Rs. 340," the broking firm has said.

Key Risks

Sharekhan stated key Risks as, "Any significant decrease in sugar production or slow recovery in the engineering business would act as a key risk to our earnings estimates."

Disclaimer - The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.