WEBULL

Getting In Cheap On Triveni Turbine Limited (NSE:TRITURBINE) Is Unlikely

Simply Wall St · 06/11 00:09

With a price-to-earnings (or "P/E") ratio of 54.1x Triveni Turbine Limited (NSE:TRITURBINE) may be sending very bearish signals at the moment, given that almost half of all companies in India have P/E ratios under 29x and even P/E's lower than 16x are not unusual. However, the P/E might be quite high for a reason and it requires further investigation to determine if it's justified.

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With earnings growth that's superior to most other companies of late, Triveni Turbine has been doing relatively well. It seems that many are expecting the strong earnings performance to persist, which has raised the P/E. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.

View our latest analysis for Triveni Turbine

pe-multiple-vs-industry
NSEI:TRITURBINE Price to Earnings Ratio vs Industry June 11th 2025
Keen to find out how analysts think Triveni Turbine's future stacks up against the industry? In that case, our free report is a great place to start.

How Is Triveni Turbine's Growth Trending?

In order to justify its P/E ratio, Triveni Turbine would need to produce outstanding growth well in excess of the market.

Taking a look back first, we see that the company grew earnings per share by an impressive 33% last year. Pleasingly, EPS has also lifted 34% in aggregate from three years ago, thanks to the last 12 months of growth. So we can start by confirming that the company has done a great job of growing earnings over that time.

Turning to the outlook, the next three years should generate growth of 13% each year as estimated by the nine analysts watching the company. With the market predicted to deliver 22% growth per year, the company is positioned for a weaker earnings result.

With this information, we find it concerning that Triveni Turbine is trading at a P/E higher than the market. It seems most investors are hoping for a turnaround in the company's business prospects, but the analyst cohort is not so confident this will happen. There's a good chance these shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the growth outlook.

The Key Takeaway

Typically, we'd caution against reading too much into price-to-earnings ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

Our examination of Triveni Turbine's analyst forecasts revealed that its inferior earnings outlook isn't impacting its high P/E anywhere near as much as we would have predicted. Right now we are increasingly uncomfortable with the high P/E as the predicted future earnings aren't likely to support such positive sentiment for long. This places shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.

It is also worth noting that we have found 2 warning signs for Triveni Turbine (1 can't be ignored!) that you need to take into consideration.

Of course, you might also be able to find a better stock than Triveni Turbine. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.