This dormant sugar giant is eyeing sweet success through smart capital allocation

CEOs running successful business operations? Plenty. But CEOs skilled at effective capital allocation? There aren't many, believes Warren Buffett. A thumb rule of his in this regard is that a company should retain earnings only when it can reinvest them in profitable avenues that create the most value for shareholders. Else, they should be returned as dividends and buybacks. Turns out a domestic player measures up to what Buffett considers an ideal capital allocation strategy. Triveni Engineering, primarily a sugar producer, has been deploying its retained earnings in ventures that promise substantial growth. The market has caught up to this, too. Despite the company's revenue and net profit growing just 4 per cent each per annum during FY20-24, the stock vaulted 6.4 times during this period, supported by the company's cash deployment strategy towards diversifying its business. Triveni generated Rs 2,950 crore cash during FY20-24 through operations and sale of some non-core