About the company:
The company was incorporated on May 9, 2000, Trident Techlabs Limited (Mcap 450 Cr) provides technology-based solutions to the aerospace, defence, automotive, telecommunications, semiconductor, and power distribution industries.
About the Management:
1. Sukesh Chandra Naithani (CEO & CFO): A seasoned entrepreneur with over 23 years of experience in the IT and electronics business, driving strategic marketing and promoting tech education services.
2. Praveen Kapoor (MD): With 23 years of expertise in marketing solutions in Electrical and Electronics Engineering, Kapoor provides visionary leadership, guiding the company towards international success.
3. Sarad Chandra Naithani (Chairman): Bringing over 15 years of experience, Naithani oversees business development and account management, leveraging his core expertise to drive profitable growth.
4. Tushar Bhanudas Borole (CTO-Power Solution): With a strong background in electrical engineering and 23 years of experience, Borole spearheads business development for power system engineering solutions in the industrial sector.
5. George Anil Dsilva (CTO-Engineering Solution): A qualified engineer with 23 years of experience in power system engineering and strategic planning, Dsilva contributes to operational efficiency and business development.
6. Subhash Chand Gupta (Independent Director): With over 35 years of banking experience, Gupta brings strategic acumen and leadership to drive sustainable growth and enhance corporate governance.
7. Sweety Khatreja (Independent Director): With a rich professional journey spanning over 15 years, Khatreja excels in accounts, finance, HR, and recruitment processes, contributing to effective managerial oversight.
8. Neha Nimesh Shah (Independent Director): With two decades of experience, Shah excels in compliance management, strategic planning, client relations, HR, and technology development, showcasing versatility and expertise across diverse domains.
The company primarily has two divisions:
(i) Engineering Solutions Division (ii) Power Solutions Division
1. Engineering Solutions Division:
The engineering solutions division operates as a knowledge-based solution-cum-service provider in technical education.
The company provides technical education to (i) the technology teams of our customers; (ii) certain institutions with whom we have tied up and (iii) other training to newly qualified engineers on specific job-related aspects. This activity is not a high revenue-generating activity for the Company and is usually provided as a support service to customers or to impart knowledge to aspiring technicians.
Entered into agreements with various technology partners in emergent technology areas of ASIC, FPGA, Functional verification, PCB, thermal Analysis etc.
Meaning of the above acronyms:
ASIC: Application-Specific Integrated Circuit, a custom-designed integrated circuit for a specific application.
FPGA: Field-programmable gate Array, a reconfigurable integrated circuit used for various digital applications.
Functional verification: Process of ensuring that a hardware or software system behaves as intended through testing and analysis.
PCB: Printed Circuit Board, a board used to mechanically support and electrically connect electronic components using conductive pathways.
Thermal Analysis: Evaluation of heat distribution and dissipation within a system to ensure proper functioning and prevent overheating.
2. Power System Solutions Division:
The power solution division offers a range of advisory services and solutions aimed at improving the efficiency of electrical power delivery systems and the development of customer and asset information systems.
They also provide specialized engineering and managerial services to the power sector in various fields like Transmission Systems planning and studies, Distribution Systems planning and studies, Industrial Power Systems planning and studies etc.
The Power distribution utilities need to focus on constantly:
(i) maximizing the capacity of aging transmission infrastructure
(ii) managing increasing amounts of intermittent, renewable generation
(iii) deployment of Smart Grid technologies leading to increasing complexity in transmission investment decisions
Engineering and Power System Solutions:
Employees:
Business Strategy:
The company’s long-term vision is to be one of India’s top service providers in its domains of expertise by leveraging its experience, dependability, and flexibility and through consolidation of allied technologies to deliver on premier technology solution organizations, specializing in diverse areas like technical pedagogy, custom-built electronics, and power engineering.
Financials:
| Year | Sales of Goods | Sales of Services | Total Revenue | PAT |
| FY21 | 9.03 Cr | 19.16 Cr | 28.19 Cr | 0.16 Cr |
| FY22 | 2.72 Cr | 27.01 Cr | 29.74 Cr | 0.65 Cr |
| FY23 | 0.95 Cr | 66.39 Cr | 67.34 Cr | 5.47 Cr |
| 7MFY24 | 1.25 Cr | 19.76 Cr | 21.01 Cr | 2.66 Cr |
Revenue Split:
Engineering – 11% in FY23 vs 47% in FY22
Power System – 89% in FY23 vs 53% in FY22
Oderbook Split:
Unexecuted orders: Rs. 18.5 Cr
Bids submitted: Rs. 55.75 Cr
Note: The orderbook numbers are as of September 2023
Power sector outlook:
India is the third-largest producer and consumer of electricity worldwide, with an installed power capacity of 426.13 GW as of November 30, 2023.
The growing population, increasing electrification, and per-capita usage will provide further impetus. Power consumption in India in FY23 logged a 9.5% growth to 1,503.65 billion units (BU)
Growth Triggers:
1. AT&C Loss: Aggregate Technical & Commercial losses, are the total cost of losses incurred during the power industry’s generation, transmission, and distribution.
Understand why power is lost in the Transmission & distribution phase: How do Electric Transmission Lines Work?
The annual financial losses in state-owned power discoms (Distribution Companies) are estimated to be Rs. 90k Cr in FY21
To reduce such losses, Trident Techlabs offers a CYMDIST, a software tool from CYME, Canada, for power distribution network analysis and planning. They also provide software for analyzing three-phase electric power networks.
2. RDSS: The AT&C loss reduction has happened because of the initiative – the Revamped Distribution Sector Scheme (RDSS), which incorporates a funding outlay of Rs 3 lakh crore to state discoms against the achievement of targets and loss reduction trajectory.
3. Government initiatives to support the power sector: Electrification efforts are supported by schemes like SAUBHAGYA Scheme, Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY), Ujwal DISCOM Assurance Yojana (UDAY), and Integrated Power Development Scheme (IPDS).
4. Railway electrification to drive the incremental power demand: In a bid to become a net zero emitter by 2030, the Indian Railways aims to be the world’s largest green railway.
5. Operational and upcoming metro projects to increase electricity demand: Currently, 987 km of metro line is under construction and 245 km of metro lines are proposed further. Electricity consumption from this segment is expected to add an average incremental power demand of 4-5 BUs every year.
Risks:
1. Corporate governance issue?
However, the delay in filing has stopped in 2023.
2. Very high valuation
Trident Techlabs issued an IPO at a price band of Rs. 35 per share. It got an immense response. The IPO was subscribed 763.30 times in Dec 2023.
It was listed at Rs. 93.25 per share
Currently, it is trading at about 81x TTM earnings. One bad Half-yearly result can easily correct the stock to half.
3. High dependency on a few clients:
Top 5 Customers – 86% in FY23 vs 57% in FY22
Why PrudentParrot finds this company interesting?
1. Good experienced Promoters: 4 out of 8 top management have an experience of more than 2 decades in their respective fields.
2. Operating in a sunrise sector: Trident Techlabs operates in a niche segment in a high-growth industry backed by long-term tailwinds.
3. Got a sizeable order from South Bihar Power Distribution Co. Limited (SBPDCL):
They were awarded a project on 27th Feb 2024 worth Rs. 42.18 Cr for the development and implementation of a Network Analysis Solution and 2 years of Annual Technical Support (Power Solutions Division) & training to Distribution companies engineers at headquarters in SBPDCL and NBPDCL (Engineering Solutions Division).
This is the largest single order the company has received that we could find. This shows the company has the required expertise and ability to deliver large orders, considering their unexecuted order book of Rs. 18.5 Cr
4. Reputed client base:
Trident Techlabs Limited serves prestigious clients nationwide, including the Ministry of Defence, Infinite Computer Solutions (India) Limited, CDAC-Thiruvananthapuram, and DIT & CS (DRDO). Despite its tender-driven business model, the company’s extensive experience in the power and engineering industry ensures repeat orders from its satisfied customers.
5. Collaboration with International companies:
Collaboration with various world-reputed companies, which support us with software for Power Systems Analysis
- CYME International T& D, Canada
- SKM Systems Analysis, USA
- Entegra primtech3D, Germany
Its capabilities in power engineering services are widely acknowledged by esteemed government regulatory bodies and prominent engineering firms, including PGCIL, CEA, PFC, WAPCOS, CPRI, REL, NDPL, Siemens, and L&T, among others, across India.
See you next time.
Until then… Stay Prudent!
Disclaimer: This article is provided for informational purposes only and should not be considered as an investment advice
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