TRIDENT - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 2.7

📊 Financials: Trident shows modest fundamentals with ROCE at 9.45% and ROE at 8.18%, reflecting limited efficiency in capital utilization. Debt-to-equity is moderate at 0.34, indicating manageable leverage. Quarterly PAT declined (₹92.4 Cr vs ₹139 Cr), showing earnings pressure. EPS stands at ₹0.87, highlighting weak profitability.

💰 Valuation: Current P/E of 31.2 is above the industry average of 19.1, suggesting overvaluation. Book value is ₹9.04, giving a P/B ratio of ~3.0, which is high relative to earnings. PEG ratio is negative (-1.32), reflecting weak growth prospects. Dividend yield at 1.88% provides moderate income support.

🏢 Business Model & Advantage: Trident operates in textiles, paper, and chemicals, with strengths in home textiles and yarn exports. Competitive advantage lies in diversified product portfolio and export presence. However, profitability pressures and weak earnings growth reduce overall attractiveness.

📈 Entry Zone: Current RSI at 31.9 suggests oversold conditions. An attractive entry zone lies between ₹23–₹25, closer to support levels and below DMA 50 & DMA 200, offering margin of safety.

🕰️ Long-Term Holding: Suitable only for patient investors seeking exposure to textiles and paper. Weak profitability and overvaluation mean staggered accumulation is advisable only at lower levels.

Positive

• ✅ Diversified business model (textiles, paper, chemicals)
• ✅ Moderate debt-to-equity (0.34)
• ✅ Dividend yield at 1.88% provides income cushion
• ✅ RSI near oversold zone (31.9) indicates accumulation opportunity

Limitation

• ⚠️ Weak ROCE (9.45%) and ROE (8.18%)
• ⚠️ Negative PEG ratio (-1.32)
• ⚠️ Quarterly PAT decline (₹92.4 Cr vs ₹139 Cr)
• ⚠️ EPS remains low (₹0.87)

Company Negative News

• 📉 Quarterly PAT dropped significantly
• 📉 Weak earnings growth reflected in negative PEG ratio
• 📉 Stock trades below DMA 50 & DMA 200, showing weak momentum

Company Positive News

• 📈 Slight increase in FII holdings (+0.07%)
• 📈 Slight increase in DII holdings (+0.03%)
• 📈 Dividend yield provides some investor support

Industry

• 🌐 Textile and paper sector supported by export demand and domestic consumption
• 🌐 Industry PE at 19.1, showing Trident trades at premium valuation

Conclusion

🔎 Trident is a diversified company with exposure to textiles, paper, and chemicals. However, profitability remains weak, valuations are stretched, and earnings growth is negative. Investors may consider accumulation only near ₹23–₹25 for margin of safety, with long-term holding dependent on improvement in profitability and export demand.

Would you like me to extend this with a peer benchmarking overlay against textile peers like Welspun India, Himatsingka Seide, and Indo Count, or a sector rotation basket scan to identify undervalued textile and paper peers for compounding?