Transformers & Rectifiers (India) Ltd, a heavy electrical equipment company, is going to reward investors with 1:1 bonus issue after 12 years of gap. The midcap stock has seen bearish trend in the new year 2025 so far, giving a buy-on-dips opportunity. Brokerage Nuvama gives positive outlook on TARIL after its Q3 results, with BUY recommendation.
After market hours on January 11, TARIL shares ended at Rs 1,119.85 apiece on NSE, with a market cap of Rs 16,807.04 crore. So far in January 2025, the stock is down by nearly 6%. However, in the latest trading session from January 6th to January 10th, the stock nosedived by more than 10%.
As per the regulatory filing, TARIL announced the issuance of bonus shares in the proportion of 1:1. This would mean that TARIL will allow 1 (One) Bonus Equity Share of Re. 1/- (Rupee One) each for every 1 (One) existing Equity Share of Re. 1/- (Rupee One) each fully paid up, held by the shareholders of the Company as on the record date.
The Bonus shares will be issued out of securities premium account received in cash and/or general reserve and/or retained earnings available as of March 31, 2024.
The company plan to credit or dispatch the upcoming bonus issue within 2 months from the date of the Board approval i.e. on or before March 07, 2025. The record date for the bonus issue will be announced in due course.
This will be the second bonus issue by TARIL. The first bonus issue was delivered in June 2013, in the ratio of 1:9.
Transformers & Rectifiers (India) Ltd Q3 Results:
As per the investors presentQ3ation, TARIL reported consolidated PAT of Rs 55.52 crore, registering a growth of 252% YoY in Q3FY25. While PAT margin stood at 9.77% in the quarter. Further, EBITDA surged by 134% to Rs 93.76 crore on year-on-year basis, while EBITDA margin expended sharply to 16.50%.
Meanwhile, during October to December 2024 quarter, the company’s revenue from operations stood at Rs 559.36 crore, registering growth of 51% YoY.
Transformers & Rectifiers India (TRIL) is among India’s largest domestic transformers. Manufacturers with an aggregate installed capacity of 37,200MVA across its units: Odhav (1,200MVA), Changodar (12,000MVA) and Moraiya (24,000MVA) in Gujarat. This capacity can be increased to 42,000MVA with repeat design orders without any additional capex, as throughput time is 20% less in repeat orders as they presently have quite some repeat design orders, brokerage Nuvama highlighted.
After its Q3 results, Nuvama’s note said, “TARIL posted Q3FY25 results in line with our estimates on stellar execution (+51.4% YoY) and strong OPM at ~15%-plus. With an order book of ~INR37bn (~2.9x FY24 sales) and INR190bn-plus prospects, we find strong sales visibility, doubling over FY25-27E. Highlights: i) Guidance: INR20bn/INR35bn/INR45bn revenue by FY25E/26E/27E and 17%-plus OPMs by FY27E. ii) Bonus issue of 1:1. iii) INR7.5bn QIP only enabling resolution; no immediate need. iv) Capacity of 55,000MVA by Q1FY26.”
On the valuation, Nuvama’s note said, “Maintain ‘BUY’ on tailwinds of high demand for HV transformers coupled with TARIL’s backward integration adding to our confidence of margin expansion. We are raising FY25E/26E/27E EPS by 10%/17%/29% and TP to INR1,450 (from INR980) at 40x FY27E PE multiple (from 35x).”
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