Trident announces capacity addition; don’t miss the action!

In a noteworthy development, Trident Ltd, a renowned player in the textile and paper manufacturing industry, has taken a decisive step towards enhancing its operational capabilities. This forward-thinking company, headquartered in Sanghera, Punjab, is a stalwart in producing cotton yarn, terry towels, bed linen, and paper products. Notably, it is a leading manufacturer and exporter of terry towels in India. Additionally, Trident Ltd. is at the forefront of sustainability, manufacturing Wheat Straw Pulp (WPP) as a primary fiber source, and distributing copier paper under the esteemed Trident brand in the domestic market. With manufacturing facilities strategically located in Barnala, Punjab, and Budhni, Madhya Pradesh, the company has consistently demonstrated its commitment to excellence.

As of its latest trading session, Trident Ltd concluded the day at an impressive Rs 38 per share, marking a substantial gain of Rs 38. It’s noteworthy that the stock’s 52-week high and low values stand at Rs 43.8 and Rs 25, respectively. This remarkable stock has earned the admiration of market participants, becoming a darling among investors.

The company’s diverse portfolio boasts 5.9 lakh spindles, 7624 rotors, 672 looms dedicated to terry towels, and 500 looms for bed linen in the textile segment. In the paper manufacturing division, Trident Ltd possesses the capacity to produce 175,000 Tons Per Annum (TPA), a testament to its significant role in the industry.

However, the recent announcement made by Trident Ltd has captured the attention of industry observers and investors alike. The company has disclosed an enhancement in the existing capacity of its sheeting business and Co-Generation (Co Gen) Power Plant located in Budhni, Madhya Pradesh, effective from September 27, 2023. This strategic move aligns with the company’s vision to fortify its position in the market and cater to the growing demands of its diverse customer base.

The proposed capacity addition for the sheeting business is set at a commendable 55,000 meters per day, bolstering its existing capacity of 1,20,000 meters per day. Notably, the current utilization rate of the existing capacity stands at an impressive 66.3%. The estimated investment required to facilitate this capacity expansion in the sheeting business amounts to Rs 228 crore. The financing structure will primarily comprise external borrowing and internal accruals, with a substantial portion, Rs 170 crore, being allocated for external borrowing.

Furthermore, Trident Ltd’s Co Gen Power Plant is poised for a substantial capacity addition of 16.3 MW, necessitating an investment of Rs 169 crore. A prudent financial approach will be adopted, with Rs 120 crore sourced through external borrowings and an internal accrual of Rs 49 crore. This expansion in the Co Gen Power Plant will significantly enhance the company’s in-house power and steam generation capabilities, in line with its ambitious growth plans.

Reflecting on its financial performance, Trident Ltd has delivered promising returns of 6.14% on a Year-to-Date (YTD) basis, underscoring its resilience and potential as an investment opportunity. Additionally, the stock offers a dividend yield of 0.95%, a testament to its commitment to shareholder value. The Return on Capital Employed (ROCE) stands impressively at 11.88%, a reflection of Trident Ltd’s efficient capital allocation and operational excellence.

As Trident Ltd charts its course towards an even more prosperous future, investors and industry enthusiasts are advised to stay tuned to witness the unfolding of this strategic expansion, a testament to Trident Ltd’s commitment to innovation and excellence in the manufacturing sector. This bold step not only fortifies the company’s position in the market but also signifies its determination to contribute significantly to the growth story of the industry.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.