Synopsis:
The stock has declined sharply amid regulatory concerns, softer quarterly performance, and margin pressure. However, relief from debarment, strong order visibility, a large enquiry pipeline, and enhancements support expectations of recovery, improved utilisation, and renewed growth momentum in the coming quarters.
India’s heavy electrical equipment sector underpins power generation and transmission, supplying boilers, turbines, generators and large transformers to utilities and industry. It sits within a heavy engineering capital goods market of about Rs 3.1–3.2 lakh crore in FY24, projected to reach roughly Rs 4.5–4.6 lakh crore by FY29, implying around 7.5–8.5% annual growth.
Regulatory Cloud Lifts
Transformers and Rectifiers (India) Ltd has seen sharp selling pressure, with the stock plunging nearly 38% over the past month. On Wednesday, shares slipped further to Rs 292.60, down 2.09% from the previous close. With a market capitalisation of Rs 8,785.85 apiece.
Transformers and Rectifiers (India) Ltd recently came under Inspection after the World Bank initiated uncontested sanctions proceedings related to an earlier transformer supply project for Nigeria’s Transmission Company. The action stems from alleged irregularities and bribery-linked concerns in a World Bank–funded power project. The development places TARIL under formal sanction until the matter is fully resolved.
Later, Transformers and Rectifiers (India) Ltd has been removed from the World Bank’s debarment list, offering temporary relief. The company has been granted time until January 12, 2026, to submit its detailed response as the sanctions proceedings continue.
Furthermore, the company clarified that the World Bank issue pertains only to a past Nigerian transformer supply project, with no impact on current or upcoming orders. Management is engaging with the Bank and the exchange for resolution. Strategically, exports will be capped at 15%, limited to Ex-works/FOB terms, with a clear focus on faster payments and avoiding MDB-funded African projects.
The company delivered a subdued performance, with revenue slipping slightly by 0.4% from Rs 462 crore in Q2FY25 to Rs 460 crore in Q2FY26. Profitability also weakened, as net profit fell 20%, declining from Rs 46 crore to Rs 37 crore, reflecting margin pressure and softer operational momentum during the quarter.
Growth Outlook Strengthening
However, Transformers & Rectifiers India expects Rs 4,000 crore in incremental order inflow, with FY26 revenue guided at Rs 2,500–2,600 crore and margins of 15–16%. Backward integration, improved raw material availability, and Moraiya expansion, finishing in 6 months, should lift utilisation to 65–68%.
The company’s Q2 operational metrics highlight solid business momentum, supported by an unexecuted order book of Rs 5,472 crore, new order inflow of Rs 592 crore, and inquiries under negotiation exceeding Rs 18,700 crore. These figures indicate strong demand visibility, a healthy pipeline, and continued interest from customers across key segments.
The company offers a diverse product portfolio that includes power, distribution, furnace, and special-purpose transformers, along with rectifier-duty transformers and shunt reactors. These products cater to high-voltage transmission, industrial processing, refining, and power systems, ensuring efficient energy flow, voltage regulation, and reliability across multiple sectors that require heavy-duty electrical equipment.
The company serves a wide domestic customer base that includes major names such as Powergrid, NTPC, Adani Renewables, Jindal Steel & Power, Tata Power, ReNew Power, JSW, Torrent Power, GE T&D, SAIL, Siemens Energy, Aditya Birla, KEC, Blue Star, UTL, and Hindustan Zinc, reflecting strong industry relationships and sustained demand.
Transformers and Rectifiers (India) Ltd is a leading power equipment manufacturer specialising in a wide range of transformers for transmission, distribution, industrial, and specialised applications. With a strong domestic client base and robust order visibility, the company plays a key role in supporting India’s growing power infrastructure and high-voltage energy needs.
Conclusion
In conclusion, while the stock has faced significant pressure due to regulatory concerns and softer quarterly results, improving order visibility, a strong pipeline, and strategic operational measures provide optimism. With sanction clarity ahead, the company appears positioned for stabilisation and potential recovery as business fundamentals remain intact.
Written by Abhishek Singh
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