Investor brief h1 fy 25

Registered office: A-44, Hosiery Complex, Phase-II Extension, Noida-201 305, Uttar Pradesh, India.

Corporate office: Express Trade Towers, 8th floor, 15-16, Sector 16A, Noida 201301, Ph: 0120-4308000, Fax: 0120-4311011

CIN: L15421UP1932PLC022174

For Immediate Release

H1 FY 25 Consolidated Results ended Sep 30, 2024

• Revenue from Operations (Net of excise duty) at ₹ 2791.7 crore, an increase of 7.1%
• • Profit Before Tax at ₹ 11.5 crore
  • • Profit After Tax at ₹ 8.6 crore

Performance Highlights

Sugar businesses:

• The Sugar business profitability in Q2 & H1 FY 25, remains subdued as there were no manufacturing operations during the quarter and all off-season expenses have been expensed during the period.
• The Alcohol business include the impact of shortage of molasses-based captive feedstock arising from the policy decision of Government of India (GoI) which regulated the diversion of sugar to B-heavy molasses / sugarcane juice in the previous season and high procurement price of maize.
• The revised prices of ethanol are awaited particularly for sugarcane juice and maize to improve the viability of such feedstocks.
• Overall sugarcane crop position seems healthy. Crushing for Sugar Season (SS) 2024-25 has commenced at four sugar units.
• Highest-everquarterly alcohol sales of 5.62 crore litres, an increase of 9.0% over corresponding previous period due to additional capacities commissioned.
• The results include loss of ₹ 12.4 crore (before tax) pertaining to recently acquired subsidiary, Sir Shadi Lal Enterprises Ltd. (SSEL).

Engineering businesses:

• Power Transmission business reported a 30.1% increase in revenue during Q2 FY 25, crossing a quarterly turnover of ₹ 100 Cr for the first time in its history. The business reported 57.8% in order booking and a record closing order book of ₹ 344.9 crore in Q2 FY 25 which improved by 22.5% over corresponding previous period. Defence business received a prestigious order during Q2 FY 25 for propulsion shafting valued at ₹ 33.8 crore from Mazagon Dock Shipbuilders Limited.
• Water business saw improved performance during Q2 FY 25 with order booking aggregating to
  ₹ 449 crore including new EPC projects for Uttar Pradesh Jal Nigam (UPJN) Prayagraj and Rajasthan Urban Drinking Water Sewerage & Infrastructure Corporation Limited (RUDSICO) Jaipur.

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Outcome of Board Meeting:

• The Board of Directors approved capex of ~ ₹ 20 crore for enhancement of production capacity of Indian Made Indian Liquor (IMIL) business.

NOIDA, November 5, 2024: Triveni Engineering & Industries Ltd. ('Triveni'), one of the largest integrated sugar

• ethanol manufacturers & engineered-to-order turbo gearbox manufacturers in the country and a leading player in water and wastewater management business, today announced its financial results for the second quarter & half year ended Sep 30, 2024 (Q2 & H1 FY 25). The Company has prepared the financial results based on the Indian Accounting Standards (Ind AS) and as in the past, has been publishing and analyzing results on a consolidated basis.

PERFORMANCE OVERVIEW: Q2/H1 FY 25 (Consolidated Results)

• Net turnover increased by 5.8% in Q2 FY 25 and by 7.1% in H1 FY 25:
  o Higher sugar and alcohol sales volume as well as realisation prices in H1 FY 25. The sales volume of sugar was lower by 1.4 % in Q2 FY 25.
  o Power Transmission business turnover grew by 30.1% and 18.4% in Q2 and H1 FY 25 respectively, which also contributed to the overall growth. However, the turnover of Water business declined by 35.6% and 28.2% in Q2 FY 25 and H1 FY 25 respectively due to lower order booking in previous quarters along with challenges in certain projects under execution.
• The profitability has been pulled down by Sugar and Alcohol segments whereas Engineering businesses contributed higher profitability:
  o The profitability of Sugar business was lower due to lower contribution margins and higher charge of off-season expenses by ₹ 28.90 crore owing to early closure of the Sugar Season 2023-24. Further, includes loss of ₹ 7.7 crore (PBIT) pertaining to the subsidiary SSELThe profitability of the Alcohol business was adversely affected due to:

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1. shortage of molasses-based feedstock resulting from the policy decision of GoI restricting diversion of sugar to B-Heavy Molasses (BHM) and sugarcane juice. It led to closure of distilleries for some period during Q2;
2. Increased transfer price of B-heavy molasses; and
3. high cost of procurement of maize, thereby significantly reducing the margins of maize operations. In the previous periods, substantial part of grain operations comprised high margin Food Corporation of India (FCI) - Rice operations
   Alcohol from molasses-based feedstocks formed 50% and 44% of total sales in H1 and Q2 FY 25 as against 64% and 65% in the corresponding periods of previous year. These primarily consist of relatively high-margin ethanol. On the other hand, the sales volume of low margin ethanol produced from maize

operations increased substantially. Additionally, segment profitability includes loss of ₹ 3 crore (PBIT) pertaining to the subsidiary SSEL.

1. The profitability of Power Transmission business increased by 20% and 33% respectively in H1 and Q2 FY 25 whereas that of Water business is almost at the same level as previous periods for H1 FY 25

The gross debt on a standalone basis as on September 30, 2024 increased to ₹ 383.3 crore as compared to ₹295.7 crore as on September 30, 2023. However, considering operational surplus funds held as fixed deposit (FD) of ₹ 117 crore, the net debt as on September 30, 2024 is at ₹ 266.3 crore as compared to ₹ 10.2 crore as on September 30, 2023. Standalone debt at the end of the period under review, comprises term loans of ₹ 247.2 crore, almost all such loans are with interest subvention. On a consolidated basis, the net debt after considering surplus funds held is at ₹ 418.8 crore as on September 30, 2024 as compared to ₹ 100.9 crore as on September 30, 2023, including ₹ 70.23 crore pertaining to the subsidiary SSEL. Overall average cost of funds (standalone) is at 6.7% during Q2 FY 25 as against 5.8% in the previous corresponding period.

Commenting on the Company's financial performance, Mr. Dhruv M. Sawhney, Chairman and Managing Director, Triveni Engineering & Industries Ltd, said:

"Overall profitability of the Company during the half year ended September 30, 2024 was subdued, impacted by lower margins in the Alcohol business and losses of new subsidiary SSEL which was recently acquired. For Sugar Season, the profitability in the first half of financial year remains muted due to expensing of fixed expenses during the off-season period, which was much longer during the current period. However, Engineering businesses performed well both in terms of profitability and order booking, resulting in combined closing order book of ₹ 2070.9 crore, an all-time high for the Company.

We are all set for the new Sugar Season and on an overall basis, the crop seems healthier due to favourable climatic factors as well as due to rigorous sugarcane development activities undertaken by us. We have commenced sugarcane crushing at four sugar units for Sugar Season (SS) 2024-25. We estimate gross sugar production for Sugar Season (SS) 2024-25 for the country at 34 million tonnes as compared to 34.3 million tonnes for the recently concluded SS 2023-24. However, the estimated production is still expected above the domestic

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consumption and we hope that the Government allows exports at an appropriate time to capitalize on high international sugar prices.

This year our focus in the Sugar business has continued towards varietal substitution, improving crop health and enhancing yield and recovery through active farmer engagement. We believe a healthy plant crop, focused crop management along with continued investments towards debottlenecking, enhancing the crush rate and efficiency improvements will help to improve the overall crush in SS 2024-25. Further close monitoring on sugar quality and refined sugar production of ~70% to ensure superior realisations, is also likely to aid the revenues and the profitability of Sugar business. The industry also keenly awaits revision to Minimum Selling Price (MSP) of Sugar which is vital for the sustainability of the industry. The MSP has remained unchanged since 2019, while input costs, particularly the Sugarcane Price (FRP and SAP), have risen significantly.

In the Alcohol business, we welcome the Government's move to lift restrictions pertaining to use of B-heavy molasses and sugarcane juice/syrup for the production of ethanol. However, several challenges still persist such as availability of feedstocks, increasing input costs which are impacting overall profitability. We look to the Government to address these through comprehensive measures that will put the industry back on track to meet the ethanol blending (in petrol) targets of the nation.

In our Engineering businesses, the Power Transmission business continues to progress well with healthy demand from traditional segments and markets while making strides with new customers especially in global markets along with diversification of its solutions portfolio. In the Water business, we are pleased to receive two new major orders which improves visibility of revenues in the near future. The business is well placed on a few bids of substantial value where we expect more updates in the next couple of quarters."

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Q2/H1 FY 25: BUSINESS-WISE PERFORMANCE REVIEW

(all figures in ₹ crore, unless otherwise mentioned)

Sugar business

Triveni is one of the largest integrated sugar producers in the country, with eight sugar units located in the state of Uttar Pradesh of which seven sugar units are FSSC 22000 certified.

Performance

Triveni:

*including export realisations as applicable

SSEL:

*including export realisations as applicable

Consolidated:

*including export realisations as applicable

Note: The above include SSEL for the period from June 21, 2024 i.e. for the period post becoming a subsidiary of the Company and resultantly, the figures for the current periods are not comparable with previous periods.

• Increased segment losses are due to higher charge of expenses of ₹ 28.90 crore in H1 FY 25 during longer off-season period due to early closure of SS 2023-24 as well as due to lower contribution margins

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• The sugar inventory as on September 30, 2024 was 20.63 lakh quintals, which is valued at ₹ 35/kg
• Co-generationoperations (including incidental co-generation) achieved external sales of ₹ 6.52 crore during H1 FY 25 as against ₹ 12.65 crore in H1 FY 24, a decline of 48%. There were no operations in Q2 FY 25, being the off-season.

Industry Scenario - Domestic

• Sugar balance sheet for Sugar Season (SS) 2024-25: With an estimated opening balance as on October 1, 2024 of around 8.3 million tonnes, domestic sales of around 29.4 million tonnes, the closing stock is expected around 8.9 million tonnes. This is after considering diversion of about 4 million tonnes of sugar equivalent into ethanol.

Industry Scenario - International

• Global Sugar Balance Sheet pointing to surplus: As per international reports, Global Sugar Balance Sheet for 2023-24 and 2024-25 season point to a surplus anticipated owing to better crop in key sugar producing nations.
• However, Brazil outlook is deteriorating: Approximately 65,000 hectares in the Center-South (CS) region, particularly in São Paulo, were affected by fires, limiting the expected sugarcane crush to ~600 million tonnes. Sugar production is projected to be in the range of 38-39 million tonnes, down from 42.5 million tonnes last year, which may push the Global Sugar Balance Sheet to a deficit.
• International sugar prices: On an average International sugar prices increased by 20-25% during FY 24. Prices have trended downwards since then as news of higher production at Brazil and Thailand merged. Since April 2024, the NY #11 raw sugar futures front month contract prices have oscillated between US 17.5 cents/lb to US 23.4 cents/lb as compared to peaks of US 28 cents/lb witnessed in FY 24. London White Sugar #5 which peaked at US $763.40 per tonne in FY 24, have remained in the range of US $ 500 to US $ 651 per tonne since April 2024. As on November 4, 2024 the NY #11 front month contract was trading at US 21.93 cents/lb while London #5 was trading at $567.4 per tonne.

Note: London #5 on left hand side (LHS) in $/tonne; NY #11 on right hand side (RHS) in US cents/lb

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Alcohol (Distillery) business

The Company has state-of-the-art distilleries spread across Muzaffarnagar (MZN) - 2 facilities, Sabitgarh (SBT), Milak Narayanpur (MNP), Rani Nangal (RNG) and Shamli in Uttar Pradesh. These facilities have the capability to produce Ethanol, Extra Neutral Alcohol (ENA), Rectified Spirit (RS) and Denatured Spirit (SDS). The Company utilises a mix of sugarcane-based as well as grain-based feedstocks. Distillers Dried Grain Solubles (DDGS), a co- product produced on grain operations is also sold to premium Institutions and has been well accepted in market. The Company also manufactures Indian Made Indian Liquor (IMIL) and Indian Made Foreign Liquor (IMFL) at its MZN facility.

Performance

Triveni:

Note: The above include SSEL for the period from June 21, 2024 i.e. for the period post becoming a subsidiary of the Company and resultantly, the figures for the current periods are not comparable with previous periods.

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• Achieved highest-ever quarterly sales of 5.62 crore litres driven by new capacities commissioned during the year.
• The profitability of the Alcohol business was adversely affected due to:
• 1. shortage of molasses-based feedstock resulting from the policy decision of GoI restricting diversion of sugar to BHM and sugarcane juice. It led to closure of distilleries for some period during Q2;
  2. Increased transfer price of B-heavy molasses; and
  3. high cost of procurement of maize, thereby reducing the margins of maize operations. In the previous periods, substantial part of grain operations comprised high margin FCI - Rice operations
• Alcohol from molasses-based feedstocks formed 50% and 44% of total sales in H1 and Q2 FY 25 as against 64% and 65% in the corresponding periods of previous year. These primarily consist of relatively high- margin ethanol. On the other hand, the sales volume of low margin ethanol produced from maize operations increased substantially.
• Additionally, segment profitability includes loss of ₹ 3 crore (before interest & tax) pertaining to the subsidiary SSEL
• Ethanol constituted 93% and 92% of alcohol sales during Q2 FY 25 and H1 FY 25, as compared to 94% and 93% in corresponding previous periods, respectively.

Domestic Industry Scenario

• For Ethanol Supply Year (ESY) 2023-24 (Nov-Oct), OMCs had floated tenders for 825 crore litres with a 15% blending target.
• Till October 6, 2024, contracts for 733 crore litres had been executed by the OMCs with 39% i.e. 288 crore litres from sugarcane-based feedstocks and the balance 61% or 445 crore litres from grain-based feedstocks
• OMCs had procured 594 crore litres out of the total contracted quantity. Within this procurement, ethanol produced from grain-based feedstocks contributed to 57% i.e. 340 crore litres, while sugarcane-based feedstocks contributed to balance 43% i.e. 254 crore litres.
• The achieved blending percentage as of October 6, 2024, stood at 13.82%.
• For ESY 2024-25 which commenced on November 1 2024, OMCs invited bids for 916 crore litres and allotted 837 crore litres for the 1st cycle.

Power Transmission Business

Triveni Power Transmission Business (PTB) based at Mysuru involves manufacturing of high-speed gears and gearboxes up to 70MW capacity with speeds of 70,000 rpm and Defence products and solutions for the Indian Navy. This business was founded in 1976 to meet the increasing demand for high-speed gears for Steam Turbine Generator (STG) applications. Today, this business is synonymous with cutting-edge technology, knowledge, and expertise, covering installations in 80+ countries across a wide range of applications. The business has extensive expertise in the design and development of all sorts of gears and gearboxes, as well as a modern, globally benchmarked manufacturing facility. PTB has grown to become one of the leading turbo gears

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manufacturing companies in India with over 45 years of track record and a rich history. It has carved a niche for

itself by being ubiquitous across industry segments and application spectrums.

Performance

*including long duration orders

• Revenues grew by 30.1% during Q2 FY 25, crossing a quarterly turnover of ₹ 100 Cr for the first time in the history of the business segment.
• Defence business received a prestigious order during Q2 FY 25 for propulsion shafting valued at ₹ 33.8 crore from Mazagon Dock Shipbuilders Limited.
• Order booking grew 57.8% during the quarter and included prestigious breakthrough orders both in Gears and Defence business.
• The Company saw good demand for its products including high technology compressor gearboxes, high power small hydro turbine applications, high power API gearboxes, Integrally geared compressor gears etc.
• The aftermarket segment is also generating strong interest from compressor, gas turbine, test rig industries.
• Overall, the business is witnessing strong growth in exports driven by increased engagement with customers and receiving qualification orders across product lines.
• The outstanding order book reached an all-time high of ₹ 344.9 crore as on September 30, 2024 including long duration orders of ₹ 105.5 crore.

Outlook

• India's economic growth is likely to continue its momentum with major investments towards infrastructure. Thus, Steel, Cement, Oil & Gas and other process industries are likely to fuel growth in addition to India becoming an attractive manufacturing hub for the global majors.
• In addition to the overall economic growth providing growth potential, market share gains and venturing into new product applications are likely to be the major driver for growth.
• International markets offer high potential for aftermarket business as well and especially in retrofitting of existing installations.
• The Government of India's continuing thrust on Atmanirbhar Bharat and Make-In-India programme directly opens plethora of opportunities for indigenisation of imported gearbox installations and expect this to be growth driver for Aftermarket business as well as Defence.

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• In the Defence segment, the business expects increased order booking from key segments of Gas Turbines packaging, propulsion gearboxes, propulsion shafting and special application pumps where the key activities of qualifications and Request For Proposal (RFP) have progressed considerably in the last couple of years
• Setting up of dedicated multi-modal facility for Defence products will also help the business gain confidence of key customers and expand its service offerings

Water business

Water Business Group (WBG) of Triveni is one of the leading businesses today in the market offering complete range of Water & Wastewater solutions, through innovative technologies and the latest equipment range. The business has strong management and innovation skills in handling EPC projects of large scale across sectors and regions. It provides turnkey execution and Operations & Maintenance (O&M) of water and wastewater treatment facilities for both the municipal and industrial sectors. The business has engineering roots and constantly invests in new technologies to ensure quality with faster deliveries at an optimised cost for its products & services. The business has carried out successful execution of more than 100 projects of varying magnitude and complexities across municipal and industrial sectors with quality and commitment to timely delivery. Cost Management & Efficiencies are in business' DNA which helps it to maintain a prominent position in this segment.

Performance

* including long duration orders for Operations & Maintenance (O&M)

• The above results are based on consolidated results including wholly owned SPVs executing (i) Mathura PPP/HAM Project awarded by UP Jal Nigam, funded by National Mission of Clean Ganga (NMCG) under Namami Gange Programme and (ii) Pali ZLD Pvt. Ltd.
• Revenues declined due to delay in execution in certain projects and delay in award of new orders wherein we had submitted lowest bids. The business expects H2 FY 25 performance to be better than H1 FY 25.
• The business has reported robust order booking during Q2 FY 25 aggregating to ₹ 448.7 crore including two new EPC projects for Uttar Pradesh Jal Nigam (UPJN) Prayagraj and Rajasthan Urban Drinking Water Sewerage & Infrastructure Corporation Limited (RUDSICO) Jaipur.
• In the previous quarter, it was declared that the Company was placed favourably for a project in Europe. The bid evaluation is still continuing at client's end prior to issue of Letter Of Award (LOA).
• The outstanding order book as on September 30, 2024 stood at ₹ 1726.0 crore, which includes ₹ 979.6 crore towards O&M contracts for a longer period of time.

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