This Transformer company, which is a manufacturer of Power, Rectifier Transformers, and Furnace in focus after the company made a strategic acquisition of Posco Poggenamp Electrical Steel for backward integration.
Price Movement
In Wednesday’s trading session, Transformers & Rectifiers India Limited stock declined and touched a lower circuit of 5 percent. The stock has delivered a return of around 21 percent in the past year and has performed in line with Nifty Index in the same period. The stock touched a day’s high of Rs. 915 and touched a lower circuit of Rs. 887 which is 5.00 percent from the previous closing price of Rs. 933.65 per share.
What happened
Transformers & Rectifiers India has acquired a controlling stake in Posco Poggenamp Electrical Steel which manufactures Cold Rolled Grain Oriented (CRGO) laminations for Reactors and Transformer up to 765 kV class / 500 MVA and is capable of increasing up to 1200 kV class/1000 MVA rating. They have an installed capacity of 24000 MT/per annum which is one of the largest and finest facilities of India with all approvals in place.
Acquisition Details
CRGO electrical steel is essential for transformers and reactors, constituting around 33 percent to 35 percent of their raw material costs and nearly 50 percent of MVA capacity.
TARIL has established a dedicated CRGO processing plant to improve quality control and supply chain efficiency. This strategic acquisition helps TARIL’s goal of 100 percent backward integration, ensuring a reliable supply of CRGO while improving operational efficiency and EBITDA margins (standalone and consolidated levels). Additionally, TARIL has secured a long-term contract with electrical steel mills for a steady supply of mother coils which further solidifies its market position.
Financial Performance
Their Q2FY25 results show revenue from operations of Rs. 462 crore which increased by 79 percent year on year, from Rs. 257 crore in Q2FY24 and a 43.47 percent increase from Rs. 322 crore in Q1FY25. Their net profit increased by 2,200 percent year on year, from Rs. 2 crores in Q2FY24 to Rs. 46 crores in Q2FY25. Quarterly, the profits were down 119 percent from Rs. 46 crore.
The debt-to-equity ratio was 0.22 times declined from 0.06 times in FY23. The RoE in FY24 stood at 32.71 percent improved from 29.04 percent a year ago. However, the RoCE stood at 42.16 percent which has improved from 37.05 percent in FY23.
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Revenue Segment
According to the company’s quarterly September 2024 report, they considered revenue from manufacturing transformers as their sole segment as of Q2FY25.
Shareholding Pattern
As of September 2024, the shareholding pattern includes promoters holding a major share of 66.16 percent stake in Transformers & Rectifiers India, Foreign Institutional Investors (FII) holding around 9.34 percent, Domestic Institutional investors (DII) standing at 6.93 percent, and public holdings standing at 17.57 percent.
About the company
Transformers & Rectifiers (India) Limited, established in 1994, is a prominent manufacturer of a wide range of transformers, including power, furnace, distribution, and rectifier transformers, with capabilities up to 1,200 kV. The company operates three state-of-the-art manufacturing facilities in Ahmedabad. Their business model focuses on providing high-quality transformer solutions for various sectors, including power utilities and renewable energy. With a commitment to innovation and quality. Transformers & Rectifiers also focuses on international expansion, serving clients in over 25 countries.
Written by Santhosh S
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