TARIL - Transformers and Rectifiers (India) Limited Share Price

In the earnings conference call held on January 8, 2026, management provided an optimistic outlook for Transformers and Rectifiers (India) Limited (TARIL). Key highlights included:

1. Financial Performance: For Q3 FY '26, revenues reached INR 704.21 crores with an EBITDA of INR 114 crores, marking a significant recovery. The EBITDA margin expanded to 16.19%.

2. Growth Projections: Management anticipates delivering at least 25% revenue growth over FY '25, targeting total revenues of approximately INR 2,600 crores and an EBITDA margin between 16% and 17% for FY '26.

3. Order Book Strength: A robust and diversified Unexecuted Order Book (UEOB) of around INR 8,000 crores is expected to support order inflow in the second half. Management anticipates a strong order inflow during Q4 FY '26, reflecting optimism stemming from high tender inquiries.

4. Strategic Developments: TARIL has commenced civil work for six backward integration facilities, with milestones aimed at improving in-house value addition and cost efficiency. The commissioning targets include a CTC plant in FY '26-27 and various other facilities throughout the same period.

5. Capacity Expansion: The company plans to enhance its manufacturing capacity, expecting to add 15,000 MVA in Q1 FY '26-27 and 22,000 MVA in Q2 FY '26-27. This expansion aims to support increased volumes and flexibility in execution.

6. Long-term Goals: Management set a target of achieving $1 billion (around INR 8,000 crores) in revenue by FY '28-29, driven by growth in the transformer business and the upcoming capabilities from backward integration.

7. Marginal Improvement: There are expectations of an increase in margins due to operational efficiencies from backward integration efforts, potentially achieving and sustaining 15% to 16% margins over the coming years.

Overall, management expressed confidence in TARIL's ability to navigate the future, leverage substantial order book strength, and realize growth through strategic initiatives and capacity enhancements.

Earnings Transcript Q&A Summary

Question 1: "Last quarter, I remember you telling that we had about a deferment of INR100 crores in revenue because of the monsoon. Is this the normalization we are looking at going forward?"

Answer: "It was not INR100 crores; it was INR70 crores to INR72 crores. We benefitted from this adjustment, but we also faced about INR40 crores in revenue deferment for this quarter as well."

Question 2: "If we are targeting a $1 billion revenue by FY '28-'29, what will drive the growth from here?"

Answer: "We're guiding towards $1 billion or INR8,000 crores revenue by FY '28-'29. This will stem from growth in our transformer business and the expansion of our backward integration facilities, supporting our order book, which we expect to close this year at around INR8,000 crores."

Question 3: "Currently, the Order Book pipeline was INR22,000 crores, now it's INR16,500 crores. How do you see the visibility and where will we be ending the order books?"

Answer: "We're pacing our order intake deliberately to avoid an order book beyond 18 months. We expect an order book of INR8,000 crores by year-end based on this strategy."

Question 4: "What technology of HVDC would we be bidding for after completing the order?"

Answer: "We will be using our indigenously made HVDC technology. Once we successfully repair and commission this existing transformer, we'll qualify for future tenders."

Question 5: "What is our cash flow position for the first 9 months?"

Answer: "We are cash flow positive, around INR30-35 crores, along with approximately INR275 crores in cash deposits with banks."

Question 6: "What will drive margin visibility in the next 1 to 2 years?"

Answer: "We expect margins to remain stable between 15% to 16%, with potential for a 1% to 2% improvement through operational excellence."

Question 7: "How should we think about ramp-up and customer approvals regarding new facilities?"

Answer: "We anticipate 60% to 70% capacity utilization by the second operational year, contingent upon passing necessary type tests for our new bushings."

Question 8: "There are reports about the government considering allowing Chinese imports. How well are we prepared?"

Answer: "Chinese manufacturers will have to make transformers in India. Currently, their operations are fully booked, so short-term, I don't foresee a significant impact on us."

Question 9: "When will the backward integration plant become operational, and what is its expected capacity?"

Answer: "The CTC plant is set for Q1 FY '26-27; the initial capacity will be up to 245 KV in the first year and increase thereafter."

Question 10: "How do you anticipate achieving the INR8,000 crores revenue target?"

Answer: "With our inquiries in the pipeline, we expect significant order wins; quarter 4 traditionally has high demand, hence we anticipate achieving our target based on past performance data."