Trident Limited — Credit Ratings, 26-03-2025: Credit Rating

Trident's consolidated financials show a stable performance in revenue and profitability during 9MFY25, with net revenue at ₹5,106 crore, compared to ₹5,050 crore in 9MFY24. The company's EBITDA decreased to ₹659 crore, down from ₹730 crore year-on-year, reflecting a decline in capacity utilization and a higher share of lower-margin products in the sales mix. Despite these challenges, the ongoing recovery in the home textiles export market has aided resilience, with demand bolstered by India's competitive cotton and yarn positioning.

Operational costs have shifted, contributing to a slight easing in margins, with EBITDA margins at 12.89% for the current period. The company maintains a net adjusted leverage ratio of 1.17x, indicating a solid balance sheet, though slightly elevated due to recent capex investment. The increased gross adjusted debt of ₹1,482 crore has largely resulted from continuing capital expenditures to enhance capacity across various product segments.

Trident's strategic focus on capacity expansion is positioned to drive future revenue growth, while healthy EBITDA margins in its paper segment, consistently around 25%, provide a fundamental cushion. Current market dynamics and government fiscal incentives afford additional operational benefits, although the reliance on key customers and geographic concentration remains a risk.

In light of these factors, maintaining a buy insight is advisable, considering Trident’s sound financial performance and the potential for future growth as new capacities come online. Investors should, however, remain cautious about external market pressures and operational efficiency as the company navigates these challenges.