Message from the Chairman

DHRUV M. SAWHNEY Chairman & Managing Director

Dear Shareholders,

The prosperity of a company is intrinsically tied to its prowess in identifying and harnessing the finest opportunities through innovative means. At Triveni, we pride ourselves on possessing these core competencies, continually reinforcing them through strategic investments and initiatives. Together, we will continue to seize the most promising prospects and channel our innovative potential to drive our organisation forward.

Over the years, the Company has pursued long-term sustainable growth through strategic investments in each of its businesses. FY 23 was no different, as we further sharpened our focus on finding the right opportunities to steer our growth across our business segments. At the same time, we raised the bar of our innovation to maximise these opportunities for greater value creation.

I am extremely pleased to inform you that these efforts translated into exceptional performance for your Company on both, the operational and financial metrics.

FY 23 proved to be a year of excellence, marked by several milestone achievements for the Company. We reported a record gross and net turnover of ₹ 6,310 crore and ₹ 5,617 crore respectively – an increase of 34% and 31% respectively over the previous fiscal. Strong performance across our businesses propelled this outstanding growth, which has positioned us even more powerfully as one of the leading companies in each industry it operates.

Record-Sugarcane Crush: A Testament to Quality, Collaboration, and Growth

In the Sugar business, our focus has been on improving the quality and availability of the sugarcane, higher engagement and collaboration with our farmers, digitalisation to improve productivity & better decision-making, and enhancing realisation. Through various on-ground initiatives and a robust sugarcane development programme, we achieved the highest ever sugarcane crush in Sugar Season 2022-23, with a year-on-year increase of 11%. It is important to highlight that despite increased instances of diseases and pests in the state of Uttar Pradesh, the Company has consistently grown its crush, growing at CAGR of ~8% since the last 7-8 years, making it among the few companies to achieve this feat.

Fuelling the Future: Advancing Ethanol Blending & Optimising Profitability in our Alcohol Business

In our Alcohol business, we have been contributing progressively to the Government’s visionary Ethanol Blended Petrol (EBP) programme, and have strategically added capacities in the last few years. FY 23 also witnessed your Company achieve a higher distillation capacity of 660 KLPD, which led to record production and sales. More importantly, we are focussed on an optimal mix to enhance profitability for the business.

Strategic Diversification Pays Off: Engineering and Alcohol Businesses Drive Significant Growth

I am happy to share that our Engineering and Alcohol businesses together contributed 51% of the total segment results for the fiscal – a sharp increase over the 38% share in the previous financial year. The progressive decline in the percentage of sugar to the Company’s revenue and PBIT is a matter of satisfaction, as a higher percentage of the non-sugar business, besides providing a healthy diversification, also brings more predictability in revenues and profitability. This is an extremely positive trend, which clearly endorses the success of our strategic focus on return-driven long-term growth. Besides indicating a lowering of our dependence on the Sugar business, it also underlines a more innovative management of the business risks.

FY 23 proved to be a year of excellence, marked by several milestone achievements, for the Company. We reported a record gross and net turnover of ₹6,310 crore and ₹5,617 crore respectively – an increase of 34% and 31% respectively over the previous fiscal. Strong performance across our businesses propelled this outstanding growth, which has positioned your Company even more powerfully as one of the leading companies in each industry it operates.

Strong Balance Sheet and Value Creation: Triveni’s Debt-Equity Ratio Improves and Record Buyback Achieved

Our healthy balance sheet has also given us much cause for satisfaction, with the net debt of ₹ 841.8 crore on a consolidated basis, as on March 31, 2023. With a view to achieving optimal leverage, there has been progressive improvement in our debt-equity ratio over the years. The ratio was 0.32x for FY 23, and has improved from 1.51x in FY 19.

The Company completed a record buyback of ₹ 800 crore in March 2023, which underscores our commitment to value creation. I would also like to share that the Board of Directors has recommended a final dividend of ₹ 3.25 per share, 325% for FY 23. This underpins our priorities of returning profits to shareholders, to enhance their overall return on investment along with fostering investor confidence in the Company’s financial stability and its growth prospects.

Driving Performance Excellence and Long-Term Growth: Our Strategic Initiatives Propel Sugar Businesses Forward

Turning to our outlook, in the Sugar businesses, our sugarcane development programme has emerged as a major propeller of our remarkable performance. We are consistently focussed on expanding the area under sugarcane cultivation, while investing in initiatives to boost crop protection, quality and yield of the sugarcane produced in our catchment areas. The good quality of the sugarcane produced is a major contributor to the Company’s growth in both the Sugar and Alcohol segments, and in revenue generation through by-products. We remain committed to making sustained investments in this area to enable Triveni’s long-term growth and ensure the continued socioeconomic development of our farmer partners.

I believe that these initiatives, coupled with the strategic investments we are making in the Sugar business, will continue to drive performance excellence for your Company in the years ahead. Having successfully completed the modernisation, debottlenecking and efficiency improvements at three of our largest sugar units, we are now looking at similar upgradation of our other plants including process change at our Milak Narayanpur to further enhance the revised sugar production and improve realisations. The ₹ 175 crore worth of CapEx investments we announced during FY 23 are aligned to this focus. This will include expansion of the Sabitgarh unit capacity, to augment the crushing capacity of the Company from 61,000 TCD to 63,000 TCD.

Similar growth and expansion plans are also on the anvil in the Alcohol segment, where, too, we have seen stupendous growth in the year under review. As you are aware, we had scaled our distillation capacities to 660 KLPD in FY 23, and plan to take them up to 1,110 KLPD. Sustained Government interventions and initiatives will continue to push growth in this segment, and we see an extremely positive outlook for the Alcohol business. We remain hopeful that the Government will further incentivise the industry through appropriate increase in realisations, especially towards production of ethanol from sugarcane juice/syrup which will push companies like ours to pursue ethanol production through this route as well.

Exceptional Growth and Expanding Horizons: Engineering Business Flourishes in Power Transmission and Water Segments

Our Engineering businesses crossed the milestone figure of ₹ 577 crore in aggregate revenue for the year, with commendable growth in both Power Transmission and Water businesses. The excellent 27% growth over FY 22 in the combined Engineering business, comprising both Power Transmission and Water, has paved the way for exceptional business expansion in these segments. A notable development in PTB is that both order booking and closing order book showed good growth, driven almost in equal measure by increase in product sales to the OEMs as well as sales in the Aftermarket segment. The Company’s high speed licence agreement with Lufkin Gears LLC expired in January 2023 and the business is now pursuing the high-speed high- power segment independently and I am happy to share that in the short duration since then, the business is receiving a resounding market response from customers which gives us the confidence that Power Transmission business will continue to contribute significantly to our revenue diversification.

The Defence segment is also an area of huge potential in the PTB business, as manifested in the significant market developments and order booking potential during the year. We are in the midst of ongoing expansion of capacities including the dedicated multi-modal facility we are setting up for our Defence products in Mysuru will empower us to further expand our share in this business.

As far as our Water business is concerned, we are well equipped and fully geared to capitalise on the multitude of domestic market opportunities, particularly in the recycle and reuse spaces. At the same time, we aim to aggressively expand our presence overseas. The EPC/HAM opportunity offers immense scope for further growth in the Water business. In a strategic shift, we are actively targeting foreign projects in the last few years. The focus in the overseas water business is on projects where we have the necessary pre-qualifications, and funding is ensured through reputed multilateral agencies.

Unlocking Value and Embracing Growth

While these operational milestones and initiatives will give a new impetus to our growth plans, another major development of the year gone by was the divestment of the entire Triveni Turbine Limited (TTL) stake for a net consideration of ₹ 1,593 crore. The divestment was aimed at unlocking value for stakeholders, timely monetisation of non-core-assets, unbundling of businesses, and enabling the long-term succession planning and facilitation of focussed management for the Company.

Fostering Business Dynamism: Capitalising on New Opportunities and Fuelling Growth

These developments and decisions have paved the way for increased business dynamism and growth in the coming quarters and years. Our focus now is on leveraging these outcomes by preparing ourselves to capture the various opportunities we see unfolding across our business segments.

We are thrilled to witness these transformative initiatives opening doors to new growth prospects. With unwavering confidence, we are poised to forge ahead, leveraging positive market conditions to propel us towards robust growth.

These exhilarating times at your Company exemplify the dedication and hard work of our talented team, paving the way for numerous milestones of success on our journey forward. I extend my heartfelt appreciation to our employees and the leadership team for their instrumental role in delivering remarkable growth this year. Moreover, our gratitude extends to our farmers, customers, partners, vendors, investors, shareholders, and all stakeholders who continue to trust in our ability to seize new opportunities through impactful initiatives and strategic investments.

With best regards,

DHRUV M. SAWHNEY Chairman & Managing Director