#EBITDA #MARGIN

EBITDA margin in FY24 stood at 17.1% as compared to 18.2% in FY23. One-time costs due to the transitioning of ramp up of multiple large deals, higher onsite mix, higher travel costs, wage hikes all led to impact on the margins. In 9M FY25, EBITDA margin stood at 16.9%, flat YoY. One-time visa costs, higher SG&A (selling, general & administrative costs), wage hikes, ESOP costs, lower earn-out reversals, had negative impact on margins. These headwinds were offset by right shoring, pricing, increased utilization, operational efficiencies, and forex.

#PAT #MARGIN

The company recorded a PAT margin of 11.1% in FY24 as compared to 11% in FY23. The margins were slightly up due to lower finance costs and higher other income. PAT margin stood at 11.5%, up by 80 bps YoY. The company was able to modestly sustain margins backed by revenue growth, higher other income along with lower depreciation costs

#ROCE

ROCE for FY24 was 31.26%. PBIT during the year stood at ₹1,494 cr, while capital employed stood at ₹5,054 cr. It increased majorly due to higher current assets.

#ROE

In FY24, the ratio stood at 25.86%. Net profit increased to ₹1,093.5 cr, while the net worth stood at ₹4,957.7 cr. Net worth increased majorly due to higher profits.

#Company #potential

• According to the Future of technology Services– Winning in this Decade, published by NASSCOM, Indian technologies services industry is forecasted to grow 10%-12% to reach $300-$350 bn revenue and share of digital in Indian technology services revenue is likely to be 55%-60% by 2025 with an annual growth of 25%-30%. • The average tech spending of global enterprises stood at 3% of their revenue which is expected to move to 5% of revenue by 2030. By FY26, ~51% of IT spending is expected to shift from traditional solutions to public cloud as compared to 41% in FY23. • India is the topmost off-shoring destination for IT companies across the world. Having proven its capabilities in delivering both onshore and off-shore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India. grow exponentially in the near future. • The country's cost competitiveness in providing IT services, which is approximately 3-4 times more cost-effective than the US, continues to be its unique selling proposition in the global sourcing market. • Companies are actively exploring opportunities for digitization, leading to increased demand for consulting services. Digital technologies and next-generation technologies such as 5G, AI/ Intelligent Enterprise, robotics and blockchain, are anticipated to • Cloud technology is a priority for majority of the organizations, while cyber-security concerns are at the top of mind of CEOs. AI, automation, data analytics, IoT and robotics will be the key drivers of the future tech stack.

#COMPANY #OUTLOOK

• They aim to deliver a revenue of $2 billion by FY27 and $5 billion by FY31. Strategic levers around FY31 plans would be shared in the subsequent quarters. The company reiterated to raise their EBIT margins by ~200-300 bps by FY27 as the company scales up. Improving operational parameters like efficient utilization, better offshore & onshore mix and pricing would aid in boosting margins. • In terms of segments, moving ahead, they expect majority growth from the healthcare space followed by BFSI and then Hi-Tech. • The comfortable utilization rate ranges for the company would be ~83%-85%, going ahead. • The company is confident of its growth on account of a healthy deal pipeline and no signs of weakness is anticipated. • The company would focus on enhanced service offerings to drive revenue growth going ahead and cost optimization levers around employee costs & efficiency to drive margin expansion. This would lead to a healthy growth in the coming quarters. • The medium-term margin levers would be efficient utilization rate, right shoring of employees, pace of higher investments normalizing which would lead to lower SG&A costs, sustained growth momentum, right pricing as well as differentiated offerings. Additionally, its platforms (SASVA & iAura) have higher margins and the uptick in those deals would aid margin expansion. • The revenue target for FY31 would be driven by scaling up of the 3 core verticals, doubling down on the Top 100 customers that contribute ~80% to the company’s revenue, expanding alternate channels like private equity & sourcing advisors and enhancing focus on global capability centres through infusion of digital capabilities and AI.

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Trident company details report

Established in 1990, formerly known as Abhishek Industries Limited, the name was changed to Trident Limited in 2011 (a flagship group of Trident group). The company has a presence in over 150 countries around the world and has two subsidiaries. In 2016, they ventured into the bed linen business by launching a factory in Budni, Madhya Pradesh. Currently, the company has three manufacturing units: two in Barnala (Punjab) and one in Budni (Madhya Pradesh). The product portfolio includes- Yarn, Home textiles (Bath & Bed Linen) and paper & chemicals. They cater to all the segments of the market- brands, department stores, home specialty chains, mass merchants and institutional customers and perform under three verticals: loyalty business, supermarket/hypermarket business and hospitality business. Their major marquee customers includes Walmart, D-mart, Ikea, Myntra, Amazon and Flipkart. The company established a foothold in the domestic and international markets through multi-brand shops and the ‘shop-in-shop’ concept.

#SALES #GROWTH

In FY24, sales stood at ₹6,809 cr, a growth of ~8% YoY, primarily owing to increase in the demand across segments. On the revenue front, Yarn and hometextile witnessed a rise, contributing ~83% of the total revenue, driven by higher capacity utilization while Paper & Chemicals witnessed a decline in the same. However, the year witnessed increased exports YoY (61% in FY24), that have helped the segment gain traction. In 9M FY25, sales declined by ~0.1% YoY to ₹5,123 cr. On the revenue front, Yarn and Bed-linen grew by ~15% and ~3% YoY to ₹2,704 cr and ₹1,023 cr, respectively. While the Bath-linen and Paper & Chemical segment observed a decline of ~7% and ~15% to ₹1,877 cr and ₹740 cr, respectively. Exports for 9M FY25 was ~₹3,088 cr v/s ~₹3,207 cr, showcasing a decline of ~4% YoY.

#EBITDA #GROWTH

In FY24, EBITDA declined by ~2% YoY to ₹928 cr. Company observed decline in the same owing to an uptrend in key raw material prices (cotton, yarn, dyes & chemicals and agro-based products) and increase in other expenses. Textiles observed price pressure due to subdued cotton prices, whereas paper prices were under pressure due to heavy imports. Major expenses for the company constituted cost of materials consumed 51% , employee benefit expense 13% and other expenses (majorly towards power & fuel and packing materials consumed) 23%. In 9M FY25, EBITDA declined by ~11% YoY to ₹648 cr. During the period, employee benefit expense witnessed a rise YoY.

#PAT #GROWTH

In FY24, PAT declined by ~21% YoY to ₹350 cr. This was due to a contraction in the operating profit. Other income rose significantly during the period, largely due to rising interest income towards bank deposits. In 9M FY25, PAT declined by ~18% YoY to ₹237 cr, led by declining operating profit. The company is focusing on enhancing production capacities by venturing into new markets through different mediums domestically and globally. The growing acceptance of the brands demonstrates healthy potential to address opportunities, going forward.

#EBITDA #MARGIN

In FY24, EBITDA margin contracted by 129 bps YoY to ~14%, mainly affected due to high input costs in both textile and paper business. The major raw materials used by the company includes cotton and wheat straw. In 9M FY25, EBITDA margin contracted by ~152 bps YoY to 12.7%, due to rising input costs. As a percentage of revenue, employee benefit expenses witnessed an expansion during the period. Segment-wise, EBIT margin during 9M FY25 for Paper & Chemicals was 27.2% (v/s 25.4% in 9M FY24), Bed-linen 16.3% (v/s 18.7% in 9M FY24), Bathlinen 5.2% (v/s 5.7% in 9M FY24) and Yarn was 4.5% (v/s 3.1% in 9M FY24).

#PAT #MARGIN

In FY24, PAT margin contracted by 183 bps YoY to ~5%. At a consolidated level, tax rate for FY24 was 27%. In 9M FY25, PAT margin contracted by ~104 bps YoY to 4.6%.

#ROCE

In FY24, the ratio declined to 10.6%, owing to a dip in the profitability. The capacity utilization in the yarn was 87%, home textile segment (Bath & Bed linen) stood at 50% and 60%, respectively. While in the paper segment, the same stood at 81% in FY24. However, better utilization of capital and emerging categories in different segments would further help in improving the operating profit and ROCE of the company. In FY24, the capacity utilization in the yarn was 87%, home textile segment (Bath & Bed linen) stood at 50% and 60%, respectively. While in the paper segment, the same stood at 81%.

#ROE

In FY24, ROE for the company stood at 8.23%, declined on account of fall in the net profit. The company is foraying into online & offline brands to grow their core business by capitalizing on recent growing retail trends. This will help in improving the profitability and return ratios of the company going ahead.

#COMPANY #POTENTIAL

• Indian textile market - It is one of the world’s largest markets. The industry contributed ~2.3% of the GDP in FY24. The domestic market faced several headwinds during the year including fluctuation of cotton prices, followed by weaker demand during the festive season. However, in Q4 FY24, the sector saw a ~8% YoY revenue growth, backed by stabilizing cotton prices. India has a share of 4% of the global trade in textiles and apparel. The market is expected to grow at 10% CAGR from FY22 to reach $250 billion by FY31. • Domestic apparel and textile industry - It contributed ~5% to the country’s GDP, 7% of industry output in value terms and 12% of the country’s export earnings. It is one of the largest in the world with a large unmatched raw material base and manufacturing strength across the value chain. • Indian • paper industry - This is a highly fragmented industry, accounting for ~5% of the world’s paper production. The domestic paper industry is expected to grow with a CAGR of ~7% over the next five years, led by robust growth in packaging grades. At a global level, the paper industry has been shifting from labor-intensive manufacturing processes to automated production facilities. FMCG and India’s retail market are further expected to drive growth for the segment, aided by rising demand for paper packaging products. E-commerce platform - The textile manufacturing industry is expected to be driven by rising online shopping demand. Manufacturers can now sell their products on a bigger platform than before, which would help expand their regional consumer base and drive the growth of the textile manufacturing market. E-commerce platforms have boosted conventional garment sales in countries like India by offering local producers with global consumers. • The cotton production in India is estimated to reach 7.2 million tonnes by 2030 driven by increasing demand from consumers.

#COMPANY #OUTLOOK

• The company expects to grow their core business by capitalizing on recent growing retail trends - Online & Offline Brands by developing robust processes & organisation by boosting efficiency, simplifying & automating processes. • It plans to explore a variety of methods for increasing shareholder value including capital allocation techniques to improve return ratios, develop current businesses and diversify into new sectors through organic and inorganic routes. • Growing manufacturing sector, humungous growth in e-commerce related deliveries, requirement for better quality packaging of FMCG products marketed through organized retail, and the demand for the upstream market of paper products, such as tissue paper, filter paper, tea bags, lightweight online coated paper and medical grade coated paper would further drive market demand. • Going forward, the company shall continue to focus on improving the volumes towards value added products. • In FY25, the company would be focusing to expand its reach in the Non-US market. With the current opportunities in hand, this is one of the drivers for growth in the business. Fashion bedding and prints would be another avenue for growth in the upcoming years. Further, organic growth in the existing customer’s assortment will further add to the revenue growth. • The company has forayed into the Renewable Energy Project to have 60% of a plant’s power supplied by renewable energy sources and has further proposed to set up solar and wind energy plants of Budni unit in Madhya Pradesh. The rationale behind this is to significantly reduce carbon footprint, in alignment with the project's objectives, realizing the vision of a Viksit Bharat. • The Trident Group Enterprises Private Limited (Singapore), an overseas wholly owned subsidiary of Trident Limited has entered and executed a definitive agreement on 23rd January 2025 towards acquisition of the entire shareholding in Trident Global (USA) and Trident Europe Limited (UK), the overseas wholly owned subsidiary of the company.