TRIVENI ENGINEERING

The company ends its year on 30th Sept  and its performance for the year was not good though its Q4 performance was very good which explains the spike up in the stock price. For year ended 30th Sept 2012, the company reported a consolidated net loss at Rs 52.30 crore v/s net profit of Rs. 22.22 crore in previous year. This was despite a 9% rise in net sales at Rs.1847 crore. The loss was mainly on account of the extraordinary charge of  Rs.79 crore, which was on account of the differential cane price for 2007-08 as directed to be paid by the Supreme Court. Interest outgo for the year was at Rs.123 crore, up 30%on a YoY and this, apart from the highest interest rates was also due to due  to increase in average utilization of working capital owing to higher production volume. Its total debt at end of 30th Sept 2012 stood at Rs.1022 crore.

For Q4, which is a period from 1st July 2012 to 30th Sept 2012, its net sales rose 25% (YoY) at Rs.477 crore. EBITDA increased by 48% at Rs.93 crore. PBT rose by a whopping 131% at Rs.39 crore and PAT was at Rs.32 crore, up 113%. The performance is attributed to sugar prices firming up in Q4. Its engineering, gear unit and water business showed a muted performance. Looking ahead, while the sugar fundamentals appear encouraging for the next year on account of estimated lower production, the profitability still depends on the cane price yet to be declared by the State Govt. During the year, the company had undertaken projects with quick pay-back at nominal capital costs to improve efficiencies and profitability , which included a refinery at Sabitgarh Sugar unit and two incidental co-generation plants at Chandanpur and Milak Narayanpur Sugar Units. All these projects will be commissioned in the 2012-13 season.  Our Editor, Mr.SP Tulsian has recommended one to buy into this stock as an investor given  its inventory of Rs.500 crore as on 30-9-12 and having unrealized gain of close to Rs.80 crores.