Triveni Turbine Ltd.’s Q1 FY26 results were below our estimates, with 20% YoY fall in sales at Rs 3.7 billion, 80bps YoY fall in Ebitda margin at 19.8% (despite 40 bps rise in gross margin at 52.2%) and 20% YoY decline in PAT at Rs 645 million, significantly below our estimate of Rs 941 million.
Deferment of customer inspection, and thus dispatches, affected revenue recognition, although Triveni Turbine remains confident of maintaining growth trajectory for FY26. Order inflow at Rs 5.4 billion and backlog at Rs 20.7 billion, up 20% YoY and 9% QoQ, remain healthy.
Enquiry pipeline in domestic market is robust (+130% YoY) offering good inflow visibility and scale-up prospects. Marking a new product foray, Triveni Turbine launched India’s first CO₂-based high-temperature heat pump, though initial contribution is expected to be limited to 1-2% of total sales.
While long term growth potential of Triveni Turbine is robust, delay in enquiry to order placement cycle prevalent in domestic and overseas markets is a key risk, which could slow down near term growth. Factoring in Q1 FY26 miss, we cut FY26E/27E EPS by 7% each and rollover valuations to Sept’27.
Retain Buy with a revised target of Rs 650 (Rs 720 earlier) based on P/E of 40x H1 FY28 EPS.
