trident-group-inspired-by-challenge-77938393About the company: 

Trident Ltd is the flagship company of Trident Group, headquartered in Ludhiana, Punjab.  Trident has presence in two major segments

  • Textiles : Yarn, Terry Towel, Bed Linen, Home furnishings
  • Paper & chemicals : wheat straw based, sulfuric acid

Trident Group has emerged as a large integrated home textile manufacturer & exports accounts for approx 30% the Company’s sales.  Trident’s has customers in textiles include global retail brands like Ralph Lauren, JC Penney, IKEA, Target, Wal-Mart, Macy’s etc.

Trident Group is the world’s largest wheatstraw based paper manufacturer. As per some reports, Trident has received environment clearance for expansion of its paper mill with improved technology and energy efficiency in Punjab’s Barnala district, entailing a cost of Rs 440 crore. Paper and chemical division contributes about 820 crore (22%) of its revenues and rest is mainly from textiles division. Its plants are located in Punjab and Madhya Pradesh.

The company apart from its green initiatives in paper area also generates about 50 MW captive power to meet its energy demands.

Highlights & Financials

For the year ended 2016, the company clocked a sales of 3705.8 cr  vis-a-vis  3779.2 cr in FY2015. It reported a net profit of  227.97 crore and declared a dividend of 9%.

The company reported good set of numbers for Q1fy17.

  • Revenue increased 32.09% yoy and 20.04% qoq
  • EBITDA margin was constant on qoq basis but down on yoy basis maily due to increase in raw material cost d 279 bps on-year.
  • Net Profit increased 26.1% yoy and 33.8% qoq .
  • The quarter witnessed 40% growth in Home textiles volume

Nothing is on the table right now. We are into capital expenditure (capex) mode for the last 2-3 years and now it is more of a consolation and we are more focussing towards ramping of our order book and going forward it is more working on improving our utilization level in home textile space.

Quarterly Results   ( Figs in Rs. crore)

Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 % qoq % yoy
Net Sales Turnover 874.38 960.99 897.77 962.16 1154.97 20.04 32.09
Total Income 876.2 961.79 901.5 965.92 1160.32 20.13 32.43
Total Expenses 677.07 782.88 724.92 762.62 913.18 19.74 34.87
EBITDA 199.13 178.91 176.58 203.3 247.14 21.56 24.11
EDIDTA Margin 22.77 18.62 19.67 21.13 21.4 1.28 -6.02
Depreciation 81.26 81.82 81.32 93.01 103.45 11.22 27.31
EBIT 117.87 97.09 95.26 110.29 143.69 30.28 21.91
Interest 44.46 36.77 23.02 33.28 41.63 25.09 -6.37
PBT 73.41 60.32 72.24 77.01 102.06 32.53 39.03
Tax 11.22 9.35 11.2 18.37 23.61 28.52 110.43
Net Profit 62.19 50.97 61.04 58.64 78.45 33.78 26.15
NP Margin 7.11 5.3 6.8 6.09 6.79 11.49 -4.5
Equity 494.3 508.85 508.95 494.82 494.97
Basic EPS 1.26 1 1.18 1.19 1.59 33.61 26.19
Face Value 10 10 10 10 10
Dividend (%) 3 3 0 0 6

 

Growth Ratios

5 years 3 years TTM
CAGR sales 0.0788 0.0337 0.0611
CAGR Profit 0.3025 0.6741 0.6862
ROE 0.1139 0.1524 0.1453

Assessment:

  • The management has given broad guidance for a 15-20% growth for the next 2-3 years
  • The growth is likely to come more from home textiles division.
  • The company has been in capital expenditure (capex) mode for the last 2-3 years and now it is well poised to cash in on the opportunities & improve its utilisation levels. The company has recently commenced production at its Bed Linen facility
  • With capex in place company may well be in a position to capitalise on opportunities which may get thrown open due to Welspun incident as there are reports that its Bed sheets are being evaluated by Target which is already customer of company’s products.
  • Trident has been witnessing robust growth rates in home textiles and over the years has evolved from a yarn manufacturer to integrated Home Textiles manufacturer
  • The company’s focus on valued added products is likely to improve its profitability.
  • Tridents has taken improprtant intivatoves in Energy management. At the 17th National Award for Excellence in Energy Management, an event organized by CII in Hyderabad, Trident got award for Excellent Energy Efficient Unit – Paper & Chemical Division, Barnala and for Energy Efficient Unit – Yarn Division, Budhni.
  • On the negative side , in past Trident group has win confidence of investors & the surge in share prices on some occasions has not been sustained.
  • Trident has received environment clearance for expansion of its paper mill with improved technology and energy efficiency in Punjab’s Barnala district, entailing a cost of Rs 440 crore. With paper industry doing well and tridents use of green technology which relies of wheat stalk, there are good prospects going ahead.
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