Trident Industries’ net profit stands at Rs. 129.35 crores.

Trident Industries’ net profit stands at Rs. 129.35 crores.

Trident’s net profit dropped 37.45% to Rs 129.35 crore in Q1 FY23 as against Rs 206.81 crore recorded in Q1 FY22. The revenue from operations surged 13.32% to Rs 1,679.9 crore in the quarter ended June 2022 from Rs 1,482.38 crore reported in June 2021. The company’s PBT stood at Rs 172.39 crore in the first quarter, down 37.22% as compared to Rs 274.6 crore posted in the Q1FY22.

The total expenses increased by 24.94% YoY to Rs 1,512.63 crore in Q1 FY23. The cost of raw materials was up by 47.32% to Rs 981.47 crore, while employee benefits expenses declined 7.97% to Rs 161.55 crore in Q1 FY23 over Q1 FY22.

Way forward for the company.

The company’s revenue from the textiles division was at Rs 1,356.46 crore and revenue from the paper and chemicals division was at Rs 323.55 crore in the current June quarter. The operating margin declined to 18.96% in June 2022 as against the 29.37% reported in June 2021. In Q1 FY23, the net profit margin was 10.24%, down from 18.52% in Q1 FY22. Almost 48% of the revenue was contributed by the bath and bed linen segment. 33% was contributed by the yarn segment, and the contribution of the paper segment has also increased from 14% to 19% in the current quarter.

Trident will capitalize on recent growing retail trends, both online and offline. The company believes it can reach a 12% bottom line by 2025, making them a national brand. To make the company robust and organized, they are working to simplify and automate processes. The firm aims to unlock long-term growth through improved return on ratios through capital allocation strategies. while expanding their business in organic and inorganic ways. They intend to generate synergy and explore business opportunities. With the help of brand building, e-commerce, product development, and exploring new market opportunities, they have a large scope of improvement.

They intend to expand their manufacturing capacities for yarns by adding 98,496 spindles, which has an existing capacity of 5.89 million spindles used at a capacity utilisation of 90% and also adding a sheeting capacity of 70,000 meters per day and 16.3 MW. The total cost of the addition of all these capacities will be INR 1377 crores and will be completed by September 2023. The mode of financing of all these projects will be through Debt & Equity. This will result in an increased competitive advantage for the company and will help to meet increased demand. The Capex plans will help to leverage business expertise and capture business synergies.

Valuations:

The net debt/equity ratio of the company is 0.34.The stock price to earnings is at 25.1 times. While the 5 year and 3 year P/E ratios are 11.1 times and 9.61 times, respectively,The return on capital employed is 23.4%. The EPS stood at Rs.1.48. Trident LTD has an EBITDA multiple of 14.4 times. The shares of Trident were up by 1.74% to close at Rs 37.9 on Wednesday, August 17, 2022.