Multibagger Transformers & Rectifiers stock hits 5% upper circuit on stellar Q2 results, up 237% in CY24

Extending their winning streak for the fourth consecutive day, shares of Transformers & Rectifiers India (TRIL), a leading transformer manufacturer, were locked at the 5% upper circuit limit, trading at ₹720 per share.

The recent surge in share price is attributed to consistent order wins, further bolstered by the company's impressive performance in the September quarter. TRIL released its September quarter number of Thursday, reporting a standalone net profit of ₹42.18 crore, which is an impressive increase of 1,274% as compared to a net profit of just ₹3.07 crore during the same period last year. Revenue from operations stood at ₹445.93 crore, reflecting a YoY increase of 75%, while EBITDA rose to ₹42.42 crore, a remarkable 260% increase YoY. 

During the quarter, the company secured new orders totaling ₹1,031 crore, boosting its total order book to ₹3,500 crore as of September 2024. Among the notable orders received was a contract for a 420 kV three-phase reactor with synthetic organic ester insulating fluid from Power Grid, as well as a 175 MVA EAF transformer order from ArcelorMittal. Additionally, the company said that there are ongoing negotiations for orders worth ₹18,500 crore, as per the company's Q2FY25 investor presentation. 

On October 3, the company received an order valued at ₹565 crore from Power Grid Corporation for the supply of transformers and reactors ranging from 80 MVAr to 500 MVA and 420 kV to 765 kV. Additionally, in September, the company secured orders from Rajasthan Rajya Vidyut Prasaran Nigam and SPIL. In August, it also received orders worth $14 million from Linxon Global Sweden.

The transformer industry is currently experiencing a surge in orders, with a particularly optimistic demand outlook in sectors such as railways, renewables, green energy, and power.

The Central Electricity Authority (CEA) estimates a total investment of ₹7.42 lakh crore from 2022 to 2030 for upgrading distribution infrastructure. Beyond the CEA's distribution plan, various other factors are anticipated to significantly contribute to the transformer sector's demand until 2030. The Indian transformer market is expected to grow at a CAGR of 12–14%, as per the recent estimates. 

Positioned strategically within these industry dynamics, the company said it aims to capitalise on forthcoming growth opportunities in the Transmission & Distribution (T&D) sector, strengthening its market position year on year.

Wealth Creator

The company's shares have experienced a consistent upward trend since July 2022, without any significant corrections, providing substantial returns to shareholders. During this period, the stock price has surged from ₹29.25 to the current trading price of ₹780, resulting in an impressive return of 2,566%.

So far this year, the stock has gained 237%, contributing to a remarkable 314% increase in calendar year 2023. Over the past five years, including the current year, the stock has delivered multi-bagger returns in three of those years. Furthermore, looking back over the last decade, the stock has consistently provided stellar returns to its investors.

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.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.