TRIL shares: Up 738% in 1 year, Nuvama sees 15% further upside on this stock

Up for 12 straight sessions, shares of Transformers & Rectifiers India Ltd (TRIL) have delivered 738 per cent return in the past one year. Nuvama Institutional Equities believes the stock has potential to rise a further 15 per cent, as  TRIL's order book is moving towards higher-margin mix and that India’s transmission capex enters new leg of upcycle.

Nuvama said a total of Rs 17,180 crore worth of inquiries are currently under negotiation and TRIL expects to convert Rs 3,500 crore into orders by FY25. TRIL's FY24 order backlog stood at Rs 2,580 crore with Rs 2,050 crore of new orders received during the year.

On Tuesday, the stock hit its 5 per cent upper circuit limit a Rs 494.25 on BSE. This was the 12th straight day of rise for the stock.

"TRIL is one of the few suppliers of HV transformers in India and set to clock a 99 per cent-plus EPS CAGR over FY24–27E. Retain ‘BUY’ with an unchanged target price of Rs 575 factoring in: 25 per cent new orders’ CAGR over FY24–27E; 14–15 per cent OPMs and 25 times FY27E EPS of Rs 26 discounted to FY26E," Nuvama said.

India’s transformer industry is five decades old with 300-plus players with capacity of 400GVA (180GVA two–three years ago). Nuvama said much of this new leg of transmission capex is for over 220kv long-distance RE connectivity.

This implies accelerated demand for HV transformers, wherein six–seven players operate with entry barriers, it said.

"We thus find India’s HV transformer demand entering a new upcycle given PGCIL’s annual capex is likely to surge 300 per cent.  TRIL happens to be one of the few transformer manufacturers with offerings across the spectrum (

Nuvama said it finds the working capital requirements rising in tandem with rising sales, given steady state debtor days of 120–130. But this will be more than offset with rising revenue leading to profit growth, enabling lower interest cost going into FY26–27, it said.

TRIL delivered 3.5 times YoY PAT growth in Q4FY24 led by 18 per cent YoY sales growth coupled with a 640 bps YoY surge in Ebitda margin at 14 per cent.