TARIL - T R I L

📊 NSE: TARIL 🏢 Electric Equipment 📅 Last Updated: 12/14/2025 14:05

💰 Financial Performance

Revenue Growth by Segment

Standalone revenue for Q2 FY26 was INR 428 Cr, representing a 4% decline compared to INR 446 Cr in Q2 FY25. However, H1 FY26 standalone revenue grew 24% YoY to INR 938.95 Cr from INR 757.52 Cr. Consolidated revenue for H1 FY26 grew 26% YoY to INR 989.36 Cr from INR 783.54 Cr, driven by a strong order book despite temporary Q2 execution delays.

Geographic Revenue Split

Not disclosed in available documents, though the company mentions significant business with Indian PSUs and a global manufacturing presence.

Profitability Margins

Standalone PAT margin for Q2 FY26 dropped to 3.83% from 9.22% in Q2 FY25. Consolidated PAT margin for H1 FY26 stood at 10.26% compared to 8.37% in H1 FY25. The Q2 decline was attributed to the execution of lower-margin legacy orders and a one-time ESOP charge of INR 3.74 Cr.

EBITDA Margin

Standalone EBITDA margin for Q2 FY26 was 9.61%, a significant decrease from 16.53% in Q2 FY25 (down 692 bps). This was caused by lower capacity utilization and execution of old, low-margin orders. The company targets a normalized EBITDA margin of approximately 16% for the full year FY26.

Capital Expenditure

The company is progressing with capacity expansion at its Moraiya plant, adding 22,000 MVA capacity. This project is expected to be completed by Q4 FY26, with revenue contributions starting in Q1 FY27. Specific INR Cr investment for this phase was not disclosed in the provided text.

Credit Rating & Borrowing

Standalone finance costs for Q2 FY26 were INR 10.75 Cr, up 2% from INR 10.27 Cr in Q2 FY25. The company has a stated strategic goal to become net debt-free within the next 18 to 24 months.

⚙️ Operational Drivers

Raw Materials

Specific raw materials like copper, CRGO steel, and transformer oil are implied for transformer manufacturing, but their specific percentage of total cost was not disclosed in the documents.

Capacity Expansion

TARIL is the second-largest transformer manufacturer in India. It is expanding the Moraiya plant by 22,000 MVA, scheduled for completion by Q4 FY26. Current capacity is distributed across three plants near Ahmedabad.

Raw Material Costs

Not disclosed as a specific percentage of revenue, but management noted that legacy orders booked 18-30 months ago had lower margins due to different cost structures compared to current high-margin bookings.

Manufacturing Efficiency

Q2 FY26 saw lower capacity utilization due to deferred project deliveries and site unreadiness at the customer end. Management expects utilization to normalize in H2 FY26 to meet the INR 1,600-1,700 Cr execution target.

📈 Strategic Growth

Expected Growth Rate

25%

Growth Strategy

The company plans to achieve its 25% growth target through the execution of a robust INR 5,472 Cr unexecuted order book and a massive inquiry pipeline of INR 18,700+ Cr. Strategy includes clearing legacy low-margin orders, completing the 22,000 MVA Moraiya expansion by Q4 FY26, and focusing on high-margin products like Shunt Reactors and niche transformers.

Products & Services

Power transformers, distribution transformers, furnace transformers, specialty transformers, and Shunt Reactors used for enhancing energy efficiency in high-voltage transmission systems.

Brand Portfolio

TARIL (Transformers and Rectifiers India Limited).

New Products/Services

The company is focusing on Shunt Reactors and niche transformers. While specific revenue contribution % for new launches wasn't given, the shift to high-margin orders is expected to bring EBITDA margins back to 16%.

Market Expansion

The company is targeting a significant increase in order book to INR 8,000 Cr by the end of FY26, up from the current INR 5,472 Cr.

Market Share & Ranking

TARIL is ranked as the second-largest transformer manufacturing company in India based on capacity.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward high-voltage transmission and a need for energy efficiency (Shunt Reactors). TARIL is positioning itself as a high-capacity player (2nd largest in India) to capture this growth, targeting INR 5,000 Cr revenue in the near future.

Competitive Landscape

The company operates in a competitive landscape for power equipment but maintains a top-tier position in India due to its 22,000 MVA expansion and existing infrastructure at three plants.

Competitive Moat

The moat is built on being the 2nd largest manufacturer by capacity in India and having the technical capability to manufacture a wide range of specialty transformers (furnace, reactors). This scale and technical breadth provide a competitive edge in large-scale utility tenders.

Macro Economic Sensitivity

The business is sensitive to government infrastructure spending and the readiness of power transmission sites, as evidenced by the Q2 revenue deferment due to site unreadiness.

Consumer Behavior

Not applicable as the company is B2B/B2G; however, customer behavior (PSU site readiness) is a critical factor for revenue timing.

Geopolitical Risks

The World Bank debarment represents a regulatory/geopolitical risk that may limit participation in certain multi-lateral funded projects.

⚖️ Regulatory & Governance

Industry Regulations

The company must comply with manufacturing standards for high-voltage equipment. A significant regulatory event is the World Bank debarment announced in November 2025, which prevents participation in new World Bank-funded tenders for an unspecified period.

Taxation Policy Impact

Standalone tax expense for Q2 FY26 was INR 8.81 Cr, representing an effective tax rate of approximately 34% on Profit Before Tax of INR 25.61 Cr.

Legal Contingencies

The World Bank debarment is the primary legal/regulatory contingency. Management notes the debarment relates to an order concluded in 2022 and claims they are addressing the issue to clear the company's image.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the long-term impact of the World Bank debarment on the company's reputation and future order inflow (potential impact on the INR 18,700 Cr inquiry pipeline). Another uncertainty is the timing of PSU site readiness which can cause 15-20% quarterly revenue volatility.