Transformers and Rectifiers (India) (532928) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 revenue was INR 460 crore with EBITDA of INR 65 crore, impacted by raw material shortages and deferred deliveries; the company manufactures a wide range of transformers and reactors, serving power and industrial sectors globally.

• Margins were affected by execution of older, low-margin orders and fixed costs on reduced revenue.

• Backward integration and capacity expansion projects are progressing, with Morai on track and Changodar delayed by one quarter due to monsoon and equipment issues.

• Order intake was moderated in H1 to align with capacity, but H2 is expected to see strong inflows with a pipeline exceeding INR 8,000 crore and a global footprint spanning 25+ countries.

• No current or pipeline orders are funded by the World Bank; the company is addressing recent debarment and expects no business impact.

Financial highlights

• FY25 revenue reached ₹1,950 crore, up from ₹1,273 crore in FY24; H1 FY26 consolidated revenue was ₹989.36 crore, up 26% YoY; Q2 FY26 consolidated revenue was ₹529.33 crore.

• FY25 EBITDA was ₹320 crore (16.41% margin); Q2 FY26 consolidated EBITDA margin was 13.81%.

• FY25 PAT was ₹187 crore (9.44% margin); H1 FY26 consolidated PAT was ₹67.46 crore, up from ₹45.91 crore in H1 FY25.

• Standalone H1 FY26 revenue was ₹938.95 crore, with PAT margin at 7.97% and EPS of 3.00.

• Inventory and WIP increased due to deferred deliveries, with about INR 100 crore of revenue expected to be recognized in the next quarter.

Outlook and guidance

• Full-year revenue growth of at least 25% over FY25 is targeted, aiming for INR 2,600 crore and 16% EBITDA margin.

• Unexecuted order book stands at ₹5,472 crore, with ₹592 crore in new order inflow and over ₹18,700 crore in inquiries under negotiation as of Q2 FY26.

• H2 FY26 expected to be robust as supply normalizes and plant utilization improves.

• Net debt-free status targeted within 18-24 months.

• FY27 and FY28 guidance remains optimistic, with backward integration and new capacity expected to drive growth.