Shares of Transformers & Rectifiers India (TRIL), one of the leading manufacturers of transformers, opened Friday's trading session strongly at ₹135.25 apiece, up from the previous closing price of ₹126.35, and further strengthened during the trade to hit a new historic high of ₹151.60, up 19.98%. In the last one-month, the shares have risen by 63%.
This year so far, the shares have delivered a multi-bagger return of 161%, moving up from ₹56 to ₹146 apiece. This exceptional performance has been seen since CY20 when the stock recorded a massive 192% return. In the subsequent years, CY21 and CY22, the stock posted returns of 69% and 59%, respectively.
Looking at the long-term performance, the shares have generated a whopping return of nearly 1600% over the last 10-year period.
Transformers & Rectifiers is engaged in the business of manufacturing and selling various kinds of transformers, such as power and distribution transformers, furnace transformers, rectifier transformers, and specialised transformers. The company aims to become the largest manufacturer of transformers for green energy.
Globally, the demand for transformers has increased manifolds, and major buyers such as Europe, USA are in short supply by 2–3 years. A big opportunity is coming in Ukraine for Indian companies like TRIL, which has the potential to meet the immediate demand of the country, the company said in its Q1FY24 earnings report.
Transmitting energy efficiently from solar parks to the grid requires higher-rated transformers, and the company said it has the necessary facilities and capabilities in place for this purpose.
The expansion of hydrogen energy capacity in the world brings a huge opportunity for TRIL, as it is one of the few companies that has the expertise to manufacture transformers. Transformers for green energy are the next-generation products of TRIL, the company added.
In the Indian market, the company is optimistic about the growth potential due to an increase in demand on account of an uptick in the capex cycle and government policies.
It anticipates a substantial increase in demand from the railway sector, particularly with the expansion of high-speed train services and metro projects. The company believes it is well-positioned to meet this rising demand.
In Q1FY24, the company's revenues dropped by 48% to ₹155.57 crore from ₹300.34 crore in Q1FY23 due to multiple factors. The reasons were inventory buildup, delays in dispatch and invoicing due to customer instructions, inspection delays, and slower order processing amid delayed payments. Additionally, the company has not received any amount from GETCO, which impacted heavily on its deliverables.
The sharp drop in revenues led the company to record a net loss of ₹12 crore in Q1FY24, as compared to a net profit of ₹6 crore in the same period of last year.
During the quarter, the company received new orders worth ₹377 crore. As of July 31, 2023, the company said its order book stood healthy at ₹2,149 crore.
Further, the company said it has participated in 2-3 export tenders during the quarter through its overseas associates and expects favorable outcomes in Q2FY24. Additionally, it also participated in various bidding processes for state utilities, central utilities, EPC projects, private initiatives, and TBCB tenders, totaling more than ₹3,700 crore in bids during the quarter.
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