Triveni Engineering & Industries Ltd, one of the largest integrated sugar manufacturers and engineered-to-order turbo gearbox manufacturers in the country and a leading player in water and wastewater management business, recently announced its financial results for the fourth quarter and full year ended Mar 31, 2024 (Q4/FY 24).

The company has prepared the financial results based on the Indian Accounting Standards (Ind AS) and as in the past, has been publishing and analysing results on a consolidated basis.

The decline in turnover during FY 24 is mainly due to Sugar (-12 per cent) and Water business (-30 per cent). The turnover of Sugar Business declined due to 16 per cent reduction in sales volumes due to lower monthly releases as determined by the government as well as reduced exports. The turnover of the water business declined due to slow execution of certain projects. The turnover of Alcohol business (net of excise) and Power Transmission business, however, increased by 9 per cent and 30 per cent. 

Profit before share of profits of associates and exceptional items and tax is 3 per cent lower at Rs 528.8 crore. Lower segment profits of Alcohol business have been substantially offset by improved profitability in the Engineering businesses due to improved margins.

Despite lower sales volumes by 16 per cent, segment profits of Sugar business are at the same level as the previous year due to higher contribution arising from 6 per cent increase in sugar realisation prices.

The profitability of the Alcohol business was adversely affected due to restrictions imposed by the government on the feedstocks – sales volumes of ethanol produced from relatively high-margin molasses and FCI rice were substituted by low-margin maize operations, procured through the open market.

The gross debt on a standalone basis as on March 31, 2024, increased to Rs 1324.7 crore as compared to Rs 825.0 crore as on March 31, 2023, due to higher sugar inventories held. Standalone debt at the end of the period under review, comprises term loans of Rs 277.8 crore, almost all such loans are with interest subvention or at subsidised interest rate. On a consolidated basis, the gross debt is at Rs 1,411 crore as on March 31, 2024, as compared to Rs 913.8 crore as on March 31, 2023. Overall average cost of funds (standalone) is at 6.5 per cent during FY 24 as against 5.1 per cent in the previous corresponding period. During the quarter, the Company's long-term credit rating was upgraded to AA+ (Stable) by ICRA.

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

"The year gone by presented several operating challenges to the company especially in the Sugar and Alcohol businesses while our Power Transmission business delivered another year of stellar performance. It is heartening to note that the company has reported satisfactory results despite such challenges. The company is hopeful of an improved performance in the coming year through a combination of policy decisions, and favourable macro environment while addressing challenges with agility.

The sugarcane crush in the just concluded Sugar Season (SS) 2023-24 was 11 per cent lower to 8.26 million tonnes, well short of our initial expectations. The major decline in crush took place in four sugar units: Deoband in Western UP and Chandanpur, Rani Nangal and Milak Narayanpur in the Central UP. The chief reasons are the climatic factors, such as, heavy rainfall and water logging in certain regions, absence of sunshine for long spell in winter and spread of red rot disease, which reduced the yields considerably, mainly in the plant cane and higher diversion to kolhus/crushers. Such trend of lower sugarcane availability was witnessed across Central and Western UP regions. The sugarcane development teams have chalked out multi-pronged strategy to contain the damage by uprooting the diseased crop to limit the spread and to carry out comprehensive varietal substitution programme to reduce the proportion of vulnerable variety Co238, especially in low-lying/ water-logging prone areas and to substitute it by other high sucrose and high yield varieties. We hope to substantially improve our crush next season.

Sugar prices have remained at healthy levels both in FY 24 and more recently. We expect these trends to continue and believe that a continually increasing portfolio of refined sugar and pharmaceutical-grade sugar production, which now stands at 70 per cent of overall sugar production, augurs well for sugar realisations for the company. We continue to make judicious investment in our facilities to enhance crush rate, sugar quality and efficiencies.