Triveni Engineering: Buy (U/R); Rs63.61 (U/R)-- UBS India Mid-Cap Premier League - Season 1

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Triveni Engineering: Buy (U/R); Rs63.61 (U/R)
􀁑 Water and gear divisions to continue to grow at robust rates -- expects 40%+
revenue CAGR in water and 30% in gears over next 2 years.
􀁑 Water division growth to be driven by industrial water treatment projects --
especially boiler feed water and effluent treatment projects for power plants;

and municipal water treatment projects. Triveni is focused on complex water
treatment projects where the gap between impurity level in water pre
treatment and post treatment is high. This approach ensures Triveni is not
competing in very competitive water segment (drinking water treatment and
water transmission and distribution projects).
􀁑 Huge growth potential is evidenced by the fact that cities in India have only
25% sewage treatment plant coverage. Triveni Engineering to invest in water
BOT assets -- explore this opportunity over time.
􀁑 Gear division focused on high speed gears, primarily for turbines below 75-
80 MW. This division requires expertise high precision and complex
metallurgy; Triveni Engineering has expertise in making gears up to 65,000
rpm for space application
􀁑 Triveni Turbines-
— Domestic order inflow is flat YY. However, the JV is pursuing order
book of over 200M USD.
— In domestic market -- paper, metal, chemical industries are driving order
inflow. Cement has been flat/weak.
— IPP market is seeing growth. The GE JV will enable Triveni to participate
in the lower end IPP market.
— Opportunities for capital deployment
— Triveni Engineering will seek opportunities in water BOT projects.
— Triveni Turbines will consider dividend payout at a later stage. May
consider setting up service centers outside India.