Shares of Transformers & Rectifiers India Ltd (TARIL) are on focus today after the company secured domestic and export orders, amounting to Rs 350 crore. The company said it won a Rs 272 crore order from Adani group. Also, it bagged Rs 78 crore order from Al Sabha Group, Iraq and Powerlink Queensland, Australia. These are for supply of transformers and reactors.
In both the cases, the delivery of transformers is likely by the next financial year. The said orders fall under the normal course of business and not within related party transactions. "The company is committed to delivering high-quality products and services and has established itself as a leading manufacturer of transformers in the country over time," TARIL said.
Incorporated in 1994, TARIL is a manufacturer of a wide range of transformers. It has around three plants around the city of Ahmedabad.
"We reiterate selective optimism on public capex/TBCB-led sectors (power generation/T&D, railways, defence and water) coupled with private capex in new-age areas (green hydrogen, electronics and data centres). Top picks include Hitachi Energy, GV T&D, CG Power, TARIL and BEL," Nuvama said in its latest note.
TARIL is confident of achieving its revenue guidance of Rs 2,000 crore and margin guidance of 14 per cent for FY25 and is hopeful of booking revenue of Rs 3,500 crore and margin of 15–16 per cent by FY26.
The company maintained that the margin expansion would be on account of backward integration & improved demand that could lead to better realisation, analysts noted. TARIL has already started on the journey towards backward integration of key critical components & has signed a technology agreement for three critical components expected to be operational by December 2025, anlaysts said adding that the company is targeting $1 billion revenue in the next three financial years.
For the December quarter, TARIL reported a 276 per cent year-on-year (YoY) rise in net profit at Rs 50.50 crore for the December quarter. Along with its quarterly earnings, TRAIL announced a bonus issue of 1:1 and a qualified institutional placement (QIP) of Rs 750 crore QIP, saying it is just an enabling resolution with no immediate need. The company also suggested a capacity of 55,000 MVA by Q1FY26.
"We expect TARIL to report exponential growth over the next three years, with revenue and PAT rising by 3.6x and 10x in FY27 from the base of FY24. Despite a meaningful re-rating in 2024, it trades at a discount to its peers. We believe that the valuation gap should narrow over the coming years given the company’s growth objectives and accelerated earnings delivery," Antique Stock Broking said in a January note.