Shares of Transformers & Rectifiers India (TRIL), a key player in the transformer manufacturing sector, hit a 5% upper circuit on Friday, October 11, driven by impressive Q2 results. The stock surged to ₹720 per share, marking the fourth consecutive day of gains for the company.
TRIL posts a massive profit surge in Q2
TRIL’s stellar performance in the September quarter significantly contributed to the recent rise in share price. The company reported a remarkable 1,274% increase in standalone net profit, reaching ₹42.18 crore compared to ₹3.07 crore in the same period last year. The company also witnessed a 75% rise in revenue, totalling ₹445.93 crore, while EBITDA soared 260% year-on-year to ₹42.42 crore.
This impressive growth signals strong operational performance and positions TRIL well in the competitive transformer industry. Investors seeking to invest in stocks with strong growth potential might find TRIL particularly attractive.
New order wins boost stock price
The stock price surge can also be attributed to consistent order wins during the quarter. TRIL secured new orders worth ₹1,031 crore, bringing the total order book to ₹3,500 crore as of September 2024. Among the standout orders was a contract from Power Grid for a 420 kV three-phase reactor using synthetic organic ester insulating fluid and a 175 MVA EAF transformer order from ArcelorMittal.
Additionally, TRIL revealed ongoing negotiations for orders worth ₹18,500 crore, a testament to the growing demand in the transformer sector. These positive developments further enhance TRIL’s appeal to those looking to invest in stocks in the power and infrastructure sectors.
Major contracts signal future growth
Notably, on October 3, TRIL received a significant order worth ₹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. Further strengthening its market position, TRIL secured additional orders in September from Rajasthan Rajya Vidyut Prasaran Nigam and SPIL. In August, it bagged contracts worth $14 million from Linxon Global Sweden.
These orders come at a time when the transformer industry is witnessing robust demand, fuelled by investments in railways, renewable energy, green energy, and power sectors. The Indian transformer market is projected to grow at a CAGR of 12–14%, making TRIL a compelling option for those eager to invest in stocks within this booming industry.
Industry outlook remains strong
The Central Electricity Authority (CEA) forecasts an investment of ₹7.42 lakh crore from 2022 to 2030 to upgrade India’s power distribution infrastructure. This massive investment, combined with the ongoing industry transformation, presents significant opportunities for companies like TRIL. The company is well-positioned to capitalise on the Transmission & Distribution (T&D) sector’s growth, further consolidating its market leadership.
Wealth creator for investors
TRIL’s stock has been on an upward trajectory since July 2022, with no major corrections, delivering substantial returns to its shareholders. The share price has skyrocketed from ₹29.25 to ₹780, representing a 2,566% increase. Year-to-date, TRIL shares have gained 237%, contributing to a 314% increase in 2023 alone. Over the past five years, the stock has been a multi-bagger, delivering stellar returns in three of those years.
For long-term investors seeking to invest in stocks with consistent growth and profitability, TRIL stands out as a proven wealth creator. Its strong fundamentals, coupled with continued industry demand, make it a solid choice for stock market enthusiasts.
Conclusion
As the transformer industry continues to experience significant growth, Transformers & Rectifiers India is well-positioned to reap the benefits. The company’s robust order book, impressive Q2 results, and strategic market positioning make it an attractive prospect for those looking to invest in stocks.
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