TRIL Shares Plunge 20% in Major Market Sell-Off
Shares of Transformers & Rectifiers India (TRIL), a prominent player in the transformer manufacturing sector, were locked in a 20% lower circuit during Monday's trading session on November 10. This sharp decline pushed the stock to its lowest point since October 2024, marking a distressing eighth consecutive day of losses for investors.
Weak Quarterly Results Trigger the Fall
The catalyst for this sustained downward spiral was the company's announcement of its September quarter results after market hours on Friday. The financial figures fell significantly short of market expectations. A detailed look reveals a 24% year-on-year decline in net profit, which dropped to ₹34 crore from ₹45 crore in the same quarter last year.
Revenue from operations remained virtually stagnant at ₹460 crore, compared to ₹462 crore in the previous year. The performance at the operating level was even more concerning, with EBITDA plummeting 27% to ₹51.3 crore. Consequently, operating margins contracted sharply by 398 basis points to 11.15%.
A primary factor behind this margin squeeze was a dramatic 116% surge in employee benefit expenses, which ballooned to ₹26.05 crore.
World Bank Debarment Adds to the Woes
Compounding the negative sentiment from the poor financial show, the company faced a major reputational blow. As reported by CNBC-TV18, the World Bank has debarred TRIL from participating in any of its financed projects. This decisive action was taken due to the company's alleged involvement in corruption and fraud related to a massive $486 million project aimed at improving Nigeria's electric grid.
A Silver Lining in H1 Performance and Order Book
Despite the dismal second quarter, the company's half-yearly (H1FY26) picture offers some respite. The net profit for H1FY26 showed a robust 57% improvement, reaching ₹105 crore. Revenue from operations also saw a healthy jump to ₹989.36 crore from ₹783.54 crore, with operating margins improving to 17%.
Furthermore, the company provided an encouraging update on its order pipeline. Order inflows for Q2 stood at ₹592 crore, boosting the total unexecuted order book to a substantial ₹5,472 crore. Perhaps most promisingly, the company disclosed that order inquiries currently under negotiation amount to a massive ₹18,700 crore.
Long-Term Perspective and Business Overview
The recent crash has been severe, pulling the stock down to trade at a 52% discount from its record high of ₹648.90 touched earlier this year. The stock has lost 30% of its value in November alone.
However, a long-term view reveals a different story. Over three years, the stock has delivered an astounding 1,000% return, and over five years, the gain is a phenomenal 6,600%. The stock had been on a nearly uninterrupted bull run since July 2022, delivering a 2,664% return from a price of ₹14.65 to recent levels.
TRIL serves a diverse range of critical sectors, including power generation, transmission, railways, and renewable energy. With a strong domestic footprint in India, the company has also expanded its reach globally, exporting its products—which include power transformers, rectifiers, and distribution transformers—to numerous countries across Asia, Africa, and the Middle East.
