TRIL Shares Stage Impressive Recovery After Steep Decline
Transformers & Rectifiers (India) Limited, commonly known as TRIL, witnessed a significant turnaround during Wednesday's trading session on November 12, as its shares surged by 8% to reach an intraday high of ₹304.70. This notable recovery comes after the stock experienced one of its worst sustained crashes in recent memory, providing much-needed relief to concerned investors.
The Dramatic Fall and Subsequent Recovery
While market experts noted the absence of any fundamental trigger behind Wednesday's rebound, the sharp decline appears to have attracted value buyers seeking opportunities. The stock had been under severe pressure, plunging 38.5% over the previous eight trading sessions, hitting its lowest level since May 2024. This extended the company's monthly losing streak to four consecutive months, with shares falling another 33% in November alone.
The magnitude of the correction becomes even more apparent when considering the stock's peak performance. TRIL shares have corrected by a massive 54% from their all-time high of ₹648.90 per share, representing one of the most significant pullbacks in the company's recent trading history.
Weak Quarterly Performance Impacts Investor Sentiment
The company's September quarter results revealed concerning financial metrics that contributed to the selling pressure. TRIL reported a net profit of ₹34 crore, marking a 24% year-on-year decline from the ₹45 crore recorded in the same period last year. Revenue from operations remained virtually stagnant at ₹460 crore compared to ₹462 crore in the year-ago quarter.
At the operating level, the company's performance showed additional weakness. EBITDA stood at ₹51.3 crore, representing a 27% drop from the ₹70 crore reported in the September 2024 quarter. Operating margins contracted significantly by 398 basis points year-on-year to 11.15%, primarily impacted by a sharp rise in employee benefit expenses, which soared 116% year-on-year to ₹26.05 crore.
World Bank Ban Adds to Troubles
Compounding the company's challenges, the World Bank has debarred Transformers & Rectifiers from participating in World Bank-financed projects. This decisive action stems from the company's alleged involvement in corruption and fraud tied to a $486 million project aimed at improving Nigeria's electric grid, as reported by CNBC-TV18. This development has raised serious concerns about the company's international reputation and future growth prospects in global markets.
Silver Lining in H1FY26 Performance
Despite the recent setbacks, the company's half-yearly performance for FY26 shows some positive indicators. Looking at the H1FY26 performance, net profit improved by 57% to ₹105 crore, while revenue from operations jumped significantly to ₹989.36 crore from ₹783.54 crore. Operating margins showed improvement, standing at 17% compared with 15.91% in the same quarter last year, suggesting underlying business strength despite recent challenges.
Long-term Performance Remains Impressive
Despite the recent correction, TRIL's long-term performance continues to deliver exceptional returns to shareholders. The stock still delivers a massive 926% return over the past three years and an astonishing 6,500% gain over the last five years. These remarkable gains reflect a consistent upward trend since July 2022 without any significant corrections until recently.
During this impressive bull run, the stock price surged from ₹14.65 to ₹405, resulting in an extraordinary return of 2,664% for investors who held through the period. This historical performance context helps explain why value buyers might be stepping in after the recent decline.
Company Overview and Business Diversification
Transformers & Rectifiers operates across a wide range of sectors, including power generation, transmission and distribution, railways, renewable energy, infrastructure, and industrial manufacturing. The company has established a strong domestic presence in India while successfully expanding internationally, exporting products to several countries across Asia, Africa, the Middle East, and beyond.
The recent volatility in TRIL shares highlights the complex interplay between short-term challenges and long-term growth potential, making it a stock worth watching closely in the coming sessions as market participants assess whether Wednesday's recovery marks the beginning of a sustained rebound or merely a temporary respite in a broader downward trend.
