Triton Valves – From Oblivion to Aiming for Gold

Triton Valves, a 49-year-old company based in Mysore with headquarters in Bangalore, is India’s leading tyre valve manufacturer, commanding over 70% market share in the domestic sector. Triton supplies to virtually every major player in the automotive sector, including PV, CV, 2W, EV, construction equipment, tractor, tyre, and wheel companies. The company operates three globally benchmarked manufacturing facilities, and its product innovations have set it apart in a competitive industry.

Some of Triton Valves’ major achievements include:

1. First Indian Company to Manufacture Tubeless and TPMS Valves: Triton leads the market in tyre technology, providing tubeless tyre valves and TPMS (Tyre Pressure Monitoring Systems), a key safety feature in modern vehicles.
2. First Indian Supplier of Service Valves to the Air-Conditioning Industry: Triton was a pioneer in the AC sector with its valve offerings.
3. E-commerce Leader: It was the first in the industry to utilize e-commerce for aftermarket distribution.
4. Patented Pressure Relief Valves for EV Battery Packs: As EVs gain traction globally, Triton has positioned itself with unique offerings in this growing segment.

Despite these impressive milestones, Triton has flown under the radar for years. Its financial performance has been lackluster, with a revenue CAGR of 8% over the past decade and earnings CAGR of just 9%. The return ratios have also been unimpressive, with a 7% Return on Equity (RoE) and 10% Return on Capital Employed (RoCE). Even though revenue has doubled over the past five years, cumulative profit after tax (PAT) has remained a modest ₹6 crore. However, recent developments suggest a significant turnaround in the company's trajectory.

So Why Are We Talking About Triton Valves Now?

Triton Valves is setting its sights on a golden future. After speaking to the company’s management, several exciting insights came to light about its plans and potential across key segments:

1. Traditional Tyre Business

• Market Share Dominance: Triton holds a 60% share in tube valves and 80%+ in tubeless valves in India.
• Higher Margins in TPMS: TPMS valves, which contain sensors to monitor tyre pressure, offer significantly higher margins than tubeless valves. In fact, TPMS valves are priced twice as high as tubeless valves.
• Future Growth in TPMS: While TPMS valves currently account for just 10% of the market, Triton estimates that this share will rise to 40-50% over the next five years.
• Margin Improvement: The company expects to see a 3-4% improvement in standalone margins as TPMS gains market penetration.

2. Futuretech Segment (Brass Mill)

• Captive Use and External Sales: Presently, 60% of Futuretech’s output is used for internal purposes, but this will shift to 60% external sales in the future.
• High Asset Turn: A relatively small investment of ₹7 crore will generate gross block of ₹35 crore, expected to contribute an incremental revenue of ₹350 crore by FY26.
• Special Alloys and Margin Expansion: The company plans to focus on special alloys with higher margins, aiming to increase Futuretech’s current margin from 4.5% to 7%.
• Applications in EV, Solar, and HVAC: Triton is targeting industries with high demand for copper alloys, such as solar energy, electric vehicles, and cooling systems.

3. Climatech Segment

• Seasonal Demand: Climatech, Triton’s air-conditioning valve business, operates primarily from October to May, but provides a natural hedge due to its use of brass from the company’s own Futuretech division.
• Triton’s Market Position: With Indian demand for AC valves expected to grow to ₹750-800 crore by FY29, Triton aims to capture a 50% market share.
• Diversification from China: Triton is positioned as the supplier of choice for companies looking to diversify their supply chains away from China.

4. Other Growth Segments

• Aerospace and Defense: Triton is in discussions with the aerospace and defense industries to localize production of certain products, aiming to generate ₹10-15 crore from this segment in the next five years.
• Component Business: The company’s component business is targeting double-digit EBITDA margins, further boosting profitability.

Our View: Triton’s Golden Future

Triton Valves is confident in its ability to grow at a conservative rate of 20%+ over the coming years. The company’s new segments, especially Futuretech, are expected to dramatically improve return ratios with asset turnover as high as 15-20x and margins in the 2.5-3% range. In the export market, Triton has a major opportunity in the HVAC segment, where it is poised to compete with China once it reaches sufficient scale by FY26.

After a substantial leap in profitability this year, we believe that Triton’s earnings will grow at a CAGR of 30-35% over the next three years, with RoEs and RoCEs climbing to the high teens. This transformation will undoubtedly re-rate the company’s valuation multiples, making Triton Valves a strong contender for long-term success.

Triton Valves is no longer a forgotten player—it’s on track to becoming a gold standard in valve manufacturing across various industries.