CRISIL Research has assigned a IER fundamental grade of 3/5 to Trident (formerly known as Abhishek Industries). The grade indicates that the company's fundamentals are 'good' relative to other listed equity securities in India. CRISIL Research has assigned a valuation grade of 5/5, indicating that market price has 'strong upside' from the current levels.

''Our fair value of the stock is Rs 26. The stock is currently trading at Rs 14 a share. The grades are not a recommendation to buy, sell or hold the graded instrument, or a comment on the graded instrument's future market price or its suitability for a particular investor,'' said CRISIL Research.

''Going ahead, the diverse product mix in home textile and the increase in yarn capacity should boost revenues. Trident's third segment - paper (20% of revenues) - has an agro-based manufacturing facility which helps it to enjoy cost advantage vis-à-vis peers. With increase in utilisation (86% in 9MFY14) of the installed capacity and more of high-margin copier paper in the product mix, we expect the paper division's revenues to improve. Going forward, we expect Trident to achieve stable revenue growth led by economies of scale, strong clientele and improvement in realisations due to focus on high-margin products,'' it said.

CRISIL Research expects Trident's revenues to grow from Rs 33.9 billion in FY13 to Rs 56.6 billion in FY16 led by improvement in demand, rupee depreciation and commissioning of new capacities. Consequently, we expect EBITDA margin to improve to 18.2% in FY16. We expect PAT of Rs 2.79 billion and EPS of Rs 6.5 in FY16. Gearing is expected to improve to 2.2x in FY16.

CRISIL Research has used the discounted cash flow method to value Trident and arrived at a fair value of Rs 26 a share.

Shares of the company declined Rs 0.01, or 0.07%, to trade at Rs 13.98. The total volume of shares settled was 29,426 at the BSE (Monday).