Trident Ltd

Trident is the flagship Company of US$1 billion Trident Group and leading manufacturer and exporter of Home Textiles & Paper products. The stock is reacting positively to its Q2FY16 numbers. Though it posted a 0.5% (YoY) drop in net revenue at Rs.961 crore, thanks to lower costs, down 4% with raw material cost coming down over 10%, the company’s EBITDA  was up 15% at Rs.179 crore and EBITDA margin showed a whopping 245 bps jump at 18.6% from 16.2%. Net profit was up 143% at Rs.51 crore.

The main reason for this jump in profitability was the reduction is debt and the consequent lowering of finance cost. In FY15, the company repaid debt to the tune of Rs.458 crore and till end of H1Fy16, it has repaid Rs.201 crore – this includes prepayment of high cost debt of Rs. 54 crore. Its total debt currently stands at Rs.2976 crore, up from Rs.2580 crore. This increase in debt despite prepayment is due to implementation of its Integrated Bed-Linen project, which has commenced commercial production. This project involved capex of Rs.1667 crore and it can generate revenue of Rs.1200 crore at optimum utilization. It expects technology to be stabilized by Q4 of FY16 and expect to achieve 50 - 60% utilization by FY17.