Triveni Turbine targets FY28 margin recovery through exports and aftermarket growth

Investment View and Recommendation

In its November 12, 2026 2QFY27 result update, Motilal Oswal retained its Buy recommendation on Triveni Turbine despite results falling below expectations. The broker expects the company to return to healthy growth and margins from FY28, supported by completion of the low-margin NTPC CO2-based energy-storage order, a ramp-up in export execution and qualification for combined-cycle data-centre orders following a recent non-data-centre combined-cycle win.

2QFY27 Financial Performance

Triveni Turbine reported lower-than-expected revenue and profitability in 2QFY27. Domestic revenue benefited from execution of the NTPC project, while export revenue declined because dispatches were deferred to 3QFY27 and 4QFY27. Profitability was affected by the weaker mix, execution of the strategic NTPC order, higher input and logistics costs, lower export billing and a higher-than-expected tax rate.

For 1HFY27, revenue increased 6.4 per cent YoY to Rs 930 crore, while EBITDA and PAT declined 39 per cent and 33 per cent YoY to Rs 120 crore and Rs 100 crore, respectively. Net operating cash flow was Rs 94.3 crore and free cash flow was Rs 57.5 crore.

Order Book and Order Momentum

Order momentum remained strong. The consolidated order book at the end of 2QFY27 was Rs 2,450 crore, up 10.5 per cent YoY, with export orders accounting for the larger share.

Growth Outlook and Market Opportunities

Motilal Oswal expects domestic demand to improve as near-term softness subsides, driven by inquiries in steel, cement, sugar, distillery and utility applications. It forecasts domestic revenue and order inflows to grow at 20 per cent and 18 per cent CAGR, respectively, over FY26 to FY29.

Export order growth and geographical diversification are central to the investment thesis. The broker forecasts export revenue and order inflows to grow at 14 per cent and 22 per cent CAGR, respectively, over FY26 to FY29. International demand is healthy in the US, South East Asia and Europe, although Middle East inquiries weakened in 1HFY27 amid geopolitical disruption. The US opportunity includes combined-cycle, process cogeneration, energy storage and carbon-capture applications.

Management Commentary and Execution

• Management expects exports and aftermarket to form a higher share of revenue in 2HFY27, supporting margin recovery.
• The NTPC project is around 85 per cent complete, with the balance expected to be billed equally in 3QFY27 and 4QFY27.
• Commissioning of the NTPC project is expected within 4QFY27. Management said losses on this low-to-negative-margin project have been conservatively provided.
• The aftermarket order book more than doubled on wins across thermal renewables, combined cycle, utility and geothermal applications.
• Management expects modest FY27 revenue growth, consolidated EBITDA broadly in line with FY26 and stronger growth prospects in FY28.

Estimates, Valuation and Target Price

Motilal Oswal cut its FY27E, FY28E and FY29E earnings estimates by 17 per cent, 12 per cent and 9 per cent, respectively. It forecasts revenue, EBITDA and PAT CAGR of 17 per cent, 15 per cent and 15 per cent, respectively, over FY26 to FY29. EBITDA margin is expected to recover to 19–20 per cent in FY28 and FY29.

Key Risks

• A slowdown in capital expenditure.
• Intensified competition.
• Technology disruption.
• Inability to innovate or launch products.
• Geopolitical headwinds that sharply reduce exports and aftermarket activity.