Mumbai: Sugar and equipment maker Triveni Engineering Industries Ltd reported a sharp surge in second-quarter net profit, driven by higher margins and orders for steam turbines, a top official said on Monday.
The company posted a net profit of Rs342.8 million ($8.57 million) in January-March on a 4% rise in sales to Rs3.79 billion. Net profit in the same period last year was Rs54 million. Its financial year is from October to September.
Triveni, India’s third largest sugar maker by capacity, said revenue from its sugar business remained flat while that of the engineering division, which primarily makes steam turbines, rose 14%.
“We have got record margins in our engineering business,” chairman Dhruv Sawhney told Reuters over telephone. “Secondly our sugar operations have also been positive as compared to last year.”
The company posted a profit before interest and tax of over 28% — its highest ever.
Most mid-sized sugar-makers such as Oudh Sugar Mills, Upper Ganges Sugar, EID Parry posted quarterly profit on better realisations after having suffered losses in the same quarter a year ago.
Triveni’s engineering division is “aggressively looking at exports,” Sawhney said.
The company exports jumped to 17% during the quarter from 3% a year ago, and it sees exports contributing to 20% of revenue in FY09.
It is looking to expand its spares and refurbishing business.
Its engineering business has orders worth Rs6.3 billion as on 31 March, and it expects growth in both sugar and engineering divisions to be steady in FY09.
“In the water segment, growth has been over 100% so there are tremendous opportunities,” Sawhney said. “We are always looking at domestic and international tie-ups to expand our reach in various segments in engineering division.”
The company will, however, continue to concentrate on its sugar business due to a better price outlook in FY09, Sawhney said.
“Sugar prices are firming up, factoring in lower production during the current year,” a press note quoted him as saying.
“Under this scenario, sugar operations coupled with co-generation and distillery businesses should provide strong support in improving the overall profitability,” he added.
Triveni shares were up 5.67 percent at 129.45 rupees in the Mumbai market. (Reporting by Swati Pandey; editing by Sunil Nair) REUTERS