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• Triveni Engineering (TREI) demerged its turbine
division. Post the demerger, the listed TREI comprises
of the sugar, water treatment, and high speed gear
divisions, and has a 21.8% stake in Triveni Turbines,
which is expected to be listed within the next two
months.
• Sugar division to continue to deleverage and generate
Rs1.2bn+ cash flow even during FY11
• 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. Triveni Engineering to explore
BOOT opportunities in water treatment.
• Gear division focused on high speed gears, primarily
for turbines below 75- 80 MW.
• Key assumptions: 1) Sugar economics to trend
towards normalized economics 2) Water and Gear
growth driven by product expansion and geographic
expansion rather than growth in underlying market.
• Shareholding: Promoter 68%
• Valuation: SOTP based methodology – sugar at P/B of
1 and Engineering businesses at 15 x FY12 earnings.
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