Summary
Transformers and Rectifiers (India) Limited - Q3 FY 2026 Earnings Call Summary Thursday, January 08, 2026 4:00 PM
Event Participants
Executives 2 Chanchal Rajora (Director Finance), Satyen Mamtora (Managing Director and CEO)
Analysts 11 Akash (Individual Investor), Aman Bansal (PESB), Amankumar Jain (Finwave Global Opportunities Fund), Anupam Goswami (SUD Life), Avikshit Vijay (Global Consilient Research), Balasubramanian (Arihant Capital), Chirag Shah (ICICI Direct), Deepak Poddar (Sapphire Capital), Manish Ostwal (Nirmal Bang), Nikhil Abhyankar (UTI Mutual Fund), Samarth Khandelwal (ICICI Securities), Sandeep Agarwal (Naredi Investment), Tushar Pendharkar (Ventura Securities), Venkatesha R.J. (Individual Research Analyst), Viren Sameer Deshpande (Alphapeak Investments)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (Consolidated) | ₹737.00 crores | +60.2% QoQ; driven by improved supply side normalization and higher plant utilization. |
| Revenue (Standalone) | ₹704.21 crores | Strong execution of projects despite ₹40-45 crores of revenue deferral due to IndAS rules. |
| EBITDA (Consolidated) | ₹129.00 crores | Significant improvement led by operating leverage and execution of healthy margin orders. |
| EBITDA Margin (Consolidated) | 17.5% | Reflects structural margin improvement and cost optimization initiatives. |
| Profit After Tax (Consolidated) | ₹76.00 crores | Robust bottom-line growth following operational momentum and disciplined financial management. |
| Unexecuted Order Book (UEOB) | ₹5,500 crores | Management plans to reach ₹8,000 crores by year-end FY26 through large Q4 inflows. |
| Order Inflow (Q3) | ₹665 crores | Deliberate moderation in fresh intake to align with 18-24 month delivery schedules. |
| Net Working Capital Days | 120-122 days | Improvement from 125 days in H1; targeting 120 days by FY26 end. |
Geographic & Segment Commentary
- Domestic Utilities & PSUs: Strong visibility with a pipeline of ₹16,500 crores in active inquiries; management expects heavy order finalization in Q4 FY26, consistent with historical PSU procurement cycles.
- Renewable Energy: Strategic focus increasing with a dedicated manufacturing line at the Changodar facility to cater to growing solar and wind segment demand.
- Specialty Transformers: Continued dominance in the furnace transformer niche due to high technical barriers; segment provides high entry protection and stable pricing power with an annual opportunity size of ₹200-300 crores.
Company-Specific & Strategic Commentary
- Backward Integration: Execution is on track for six facilities; the CTC plant is slated for Q1 FY27, Press Board for Q3 FY27, and RIP Bushing/Fabrication for Q4 FY27 to reduce external dependencies.
- HVDC Breakthrough: Secured an exceptional HVDC repair order from PowerGrid, making TARIL the first Indian-origin company to enter the HVDC ecosystem and paving the way for indigenous manufacturing post-2027.
- Capacity Expansion: Organic expansion will increase total capacity from 40,000 MVA to 75,000 MVA by Q2 FY27; Changodar expansion (15,000 MVA) is due in Q1 FY27 and Moraiya (22,000 MVA) in Q2 FY27.
- Governance: Management highlighted best-in-class disclosure by declaring audited results within eight days of quarter-end and is addressing a World Bank query with a formal reply filed in Jan 2026.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY26 Revenue | ₹2,600 crores | Represents ~25% YoY growth over FY25 based on strong execution visibility. |
| FY26 EBITDA Margin | 16% - 17% | Management confident in sustaining margins through operating leverage and healthier order mix. |
| FY29 Revenue Target | $1 Billion (~₹8,000 crores) | Driven by expanded transformer capacity and new revenue streams from backward integration products. |
| Net Debt Status | Net Debt Free | Target to achieve through internal accruals within the next 18 to 24 months. |
Risks & Constraints
| Risk | Context |
|---|---|
| Supply Chain (CRGO/CTC) | Global shortages of CRGO and copper conductors remain a work-in-progress; management is mitigating this via internal CTC manufacturing starting FY27. |
| Concentration Risk | High dependency on the 18-24 month execution cycle; management is actively trying to cap the order book at 18 months to avoid commodity price exposure. |
| Regulatory/Compliance | Pending World Bank clarification on previous queries; management expects resolution in 2-3 weeks and maintains it has no current financial impact. |
Q&A Highlights
Order Pipeline and Inflows
- Question: What gives confidence in reaching an ₹8,000 crore order book by year-end given the Q3 decline? (Chirag Shah)
- Answer: Historically, Q4 is the largest quarter for PSU awards; TARIL has ₹16,000 crores in active tenders on the verge of finalization (Chanchal Rajora).
HVDC Strategy
- Question: Which HVDC technology will the company bid for in the future? (Samarth Khandelwal)
- Answer: After repairing the current PowerGrid unit, the company will qualify to bid using its own indigenous HVDC technology, likely seeing meaningful orders post-FY27 (Satyen Mamtora).
Margin Sustainability
- Question: Can the company achieve 40% gross margins with backward integration? (Tushar Pendharkar)
- Answer: Current product margins are 15-16%; backward integration is expected to add 200 bps to EBITDA, with FY28 being the first full year showing the total impact (Chanchal Rajora).
Chinese Competition
- Question: How will the potential easing of Chinese import restrictions affect the company? (Akash)
- Answer: Regulations require local manufacturing; only one Chinese player (TBA) currently operates in India and is already fully booked for 18 months. New entrants would face lengthy product and plant approval cycles (Satyen Mamtora).
Key Takeaway
Transformers and Rectifiers (India) Limited delivered a record Q3 FY26 with consolidated revenues of ₹737 crores and an EBITDA margin of 17.5%, signaling a recovery from previous supply chain disruptions. The company achieved a major technological milestone by securing an HVDC repair order from PowerGrid, positioning it for high-value future tenders. Strategically, TARIL is doubling down on backward integration for CTC, bushings, and press boards, which is projected to add 200 bps to margins once fully operational by FY27-28. Total capacity is set to reach 75,000 MVA by H1 FY27 to support the ambitious $1 billion revenue target by FY29. Management maintains a positive outlook, targeting ₹2,600 crores in revenue for FY26 and aiming to become net debt-free within 24 months through internal accruals and operational efficiency.
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