1 Bonus Share For 1 On Valentine's Day; BUY Transformers And Rectifiers Stock Ahead Of February 14 Record Date

Bonus Issue: This Valentine's Day, heavy electrical equipment company trading as a midcap, Transformers And Rectifiers is going to reward investors with 1:1 bonus issue to its eligible investors. The record date is set on February 14 to identify eligible shareholders. This will be the second bonus issue by TARIL. The consensus recommendation on TARIL is buy for potential 64% upside ahead.

As per the regulatory filing, TARIL announced the issuance of bonus shares in the proportion of 1:1. This would mean that TARIL will allow 1 (One) Bonus Equity Share of Re. 1/- (Rupee One) each for every 1 (One) existing Equity Share of Re. 1/- (Rupee One) each fully paid up, held by the shareholders of the Company as on the record date.

The Bonus shares will be issued out of securities premium account received in cash and/or general reserve and/or retained earnings available as of March 31, 2024.

This will be the second bonus issue by TARIL. The first bonus issue was delivered in June 2013, in the ratio of 1:9.

TARIL reported consolidated PAT of Rs 55.52 crore, registering a growth of 252% YoY in Q3FY25. While PAT margin stood at 9.77% in the quarter. Further, EBITDA surged by 134% to Rs 93.76 crore on year-on-year basis, while EBITDA margin expended sharply to 16.50%.

Meanwhile, during October to December 2024 quarter, the company's revenue from operations stood at Rs 559.36 crore, registering growth of 51% YoY.

Transformers & Rectifiers India (TRIL) is among India's largest domestic transformers. Manufacturers with an aggregate installed capacity of 37,200MVA across its units: Odhav (1,200MVA), Changodar (12,000MVA) and Moraiya (24,000MVA) in Gujarat. This capacity can be increased to 42,000MVA with repeat design orders without any additional capex, as throughput time is 20% less in repeat orders as they presently have quite some repeat design orders, brokerage Nuvama highlighted.

On the valuation, Nuvama's note said, "Maintain 'BUY' on tailwinds of high demand for HV transformers coupled with TARIL's backward integration adding to our confidence of margin expansion. We are raising FY25E/26E/27E EPS by 10%/17%/29%
and TP to INR1,450 (from INR980) at 40x FY27E PE multiple (from 35x)."