Transformer stock with revenue guidance of more than 40% for next 3-4 financial yr to keep on your radar
During the trading session of Friday, the shares of a prominent player in the manufacturing of transformers and reactors in India surged by nearly 3.1 percent to hit an intraday high at Rs. 1,057 on BSE.
Stock Performance
With a market capitalisation of Rs. 15,323.5 crores, the shares of Transformers & Rectifiers (India) Limited (TRIL) closed in the red at Rs. 1,021, down by 0.4 percent, as against its previous closing price of Rs. 1,025.2.
The stock hit its 52-week high at Rs. 1,300.45 on 8th January 2025, and compared to its Friday’s closing price of Rs. 1,021, the stock is trading at a discount of nearly 28 percent.
The stock has delivered multibagger returns of nearly 289 percent of returns in one year, while around 37 percent of positive returns in the last six months. Meanwhile, the shares of Transformers & Rectifiers have fallen by around 12.5 percent in the last one month.
Management Guidance & Capex
The revenue target for FY25 is set at Rs. 2,000 crores, with the target for FY26 expected to exceed Rs. 3,500 crores. Additionally, the long-term revenue guidance for TRIL is to reach $1 billion in revenue over the next 3-4 financial years.
This implies a compound annual growth rate (CAGR) of nearly 44 percent, driving revenue from Rs. 2,000 crores in FY25 to around Rs. 8,600 crores (or $1 billion) by the end of FY29.
Management remains optimistic about growth prospects in the Indian energy sector, especially with significant opportunities in infrastructure development.
The company plans to adopt a selective approach towards order inflows, prioritizing high-margin and quick-payment projects to improve profitability.
TRIL is focused on improving its product mix while maintaining a sustainable margin trajectory, with a target of achieving EBITDA margins of 17 percent or more by FY27.
Regarding capital expenditure, the company’s ongoing project to expand its capacity by 15,000 MVA is on track and is expected to be operational by February-March 2025, with order bookings anticipated to
begin in Q1 FY26.
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Recent Developments
In Q3 FY25, TRIL acquired a controlling stake in the CRGO processing unit, achieving 100 percent backward integration, which is projected to reduce raw material costs by nearly 4 percent. The company also entered into a supply agreement for mother coils. CRGO accounts for around 30-35 percent of the total raw material used in transformer production.
Additionally, TRIL entered into three strategic technological partnerships aimed at enhancing its capabilities and improving supply chain efficiency, expected to become operational by Q4 FY26.
Order Book
As of Q3 FY25, the company’s unexecuted order book totaled ₹3,686 crores. Power Transformer products represented the largest share, accounting for 66 percent, followed by Reactor products at 27 percent, and Special Duty Transformers at 7 percent.
The new order flow for the quarter amounted to Rs. 631 crores, with over Rs. 19,000 crores in inquiries currently under negotiation. Additionally, TRIL successfully conducted a Short Circuit Test of a 500 MVA Transformer.
Financials
The company reported a significant growth in the revenue from operations, experiencing a year-on-year rise of nearly 51.5 percent, increasing from Rs. 369.4 crores in Q3 FY24 to Rs. 559.4 crores in Q3 FY25.
Similarly, during the same period, the company’s net profit increased from Rs. 15.8 crores to Rs. 55.5 crores, representing an impressive growth of around 252 percent YoY.
On a year-on-year basis, the consolidated EBITDA increased from Rs. 40.1 crores in Q3 FY24 to Rs. 93.8 crores in Q3 FY25, registering a growth of 134 percent YoY, while the company’s EBITDA margins grew to 16.5 percent from 10.81 percent, over the same period.
About the Company
Transformers and Rectifiers (India) Limited (TRIL) is engaged in the business of manufacturing power, furnace and rectifier transformers.
The company offers a wide range of transformers: power transformers, distribution transformers, furnace transformers, rectifier transformers and shunt reactors, which have applications in the power transmission and distribution sector, and other industrial sectors.
The company has completed more than 16,000 Installations worldwide with a presence in over 25 countries, including ‘Dynamic Short Circuit Test’ on 153 Transformers at Renowned Test Laboratories like KEMA & CPRI.
Written by Shivani Singh
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