Thread by @raghavwadhwa

🏭Sector In Focus: Electrical Equipment🏭

🗞️Related News
Electricity shortage is coming in 2 Years: Heads up by Tesla

💡Transformers & Rectifiers India Ltd.: A Small Cap manufacturer of Power, Furnace & Rectifier Transformers

Company Analysis📚👇
Not a Buy/Sell Recommendation

⚡️Transformers & Rectifiers India Ltd.:
🔹Incorporated in 1994, is a manufacturer of Power, Furnace and Rectifier Transformers.
🔹It is the only Indian company with the capacity to manufacture Green Energy Transformers.

🔶Key Metrics:
🔹M Cap: ₹2,525 Cr
🔹Current Price: ₹190
🔹P/E Ratio: 207
🔹ROCE: 14.8%
🔹OPM: 7.46%
🔹3 Years Sales Growth: 25.4%

🔶Product Portfolio:
⚡️Power Transformer:
🔹The company produces a variety of transformers such as generator transformers, unit auxiliary transformers, step-up/step-down transformers, interconnecting auto transformers, and dual voltage three-winding transformers.

🔹It manufactures a range from medium to ultra-high voltage (1200 kV AC)
🔹And from small (5 MVA) to very large power ratings (500 MVA).

⚡️Shunt Reactor:
🔹It produces Shunt and Series Reactors with a maximum capacity of 135 MVAr for 400 kV three-phase systems.
🔹And reactors up to 110 MVAr for 765 kV single-phase applications.

⚡️Furnace Transformer:
🔹It offers a variety of furnace transformers with capacities of 220 MVA & 101 kA, including:
🔹Electric Arc Furnace Transformer
🔹Submerged Arc Furnace Transformer
🔹Ladle Refining Furnace Transformer
🔹DC Arc and Induction Furnace Transformer

⚡️Distribution Transformers:
🔹It manufactures Distribution Transformers with capacities of 500 kVA & above including:
🔹Earthing transformers
🔹Three winding transformers
🔹Step up & Step down transformers
🔹Dual voltage Primary or Secondary transformers.

⚡️Rectifier Transformers:
🔹It manufactures a wide range of Rectifier application transformers with the capacity of up to 160 kA DC.
🔹Designed for application with DC power supplies within the metallurgical and chemical sectors.

🔶Manufacturing Facilities:
🔹The company operates three manufacturing units with a total capacity of 33,200 MVA located in Gujarat:
🔹Odhav- 1,200 MVA
🔹Changodar- 12,000 MVA
🔹Moraiya- 20,000 MVA

🔶Revenue Mix(FY23):
🔹Power Transformer: 70%
🔹Furnace Transformer: 5%
🔹Rectifier Transformer: 1%
🔹Distribution Transformer: 8%
🔹Shunt Reactors: 5%

🔶Geographical Break-up(H1FY24):
🔹Domestic: 95%
🔹Exports: 5%

🔶Customer-Wise Revenue Break-up(HY1FY24):
🔹Central /State /Railway: 51%
🔹Industrial Customer: 33%
🔹Export: 5%
🔹Others: 11%

🔶Order Book:
🔹The unexecuted order book as of Sept 2023 amounts to ₹2,145 Cr, reflecting a YOY growth of 57%.
🔹In Q2FY24, the company secured new orders worth ₹314 Cr and is currently negotiating tenders and inquiries for both domestic and export markets.

🔶Product-Wise Order Book(H1FY24):
🔹Power Transformer: 71%
🔹Reactors: 18%
🔹Distribution Transformer: 3%
🔹Furnace Transformer: 7%
🔹Rectifier Transformer: 1%

🔶Customer Segment-Wise Order Book(H1FY24):
🔹Central Utilities: 34%
🔹State Utilities: 11%
🔹Industrial Customer: 40%
🔹Renewable Segment: 9%
🔹Export: 6%

🔶Diverse Industrial Applications:
🔹The company manufactures transformers for use in various industries, including:
🔹Distribution
🔹Petrochemical
🔹Pharmaceutical
🔹Power Transmission
🔹Metal Processing
🔹Cement
🔹Green Energy
🔹Railways
🔹Paper and Pulp
🔹Mining

🔶Collaborations:
🔹The Co has a technological tie-up with Zaporozhtransformator (ZTR), Ukraine, for 765 KV transformers.
🔹Partners with Fuji Electrical Co. Ltd (Fuji), Japan, for 420 KV transformers and up to 765 KV shunt reactors and others.

🔶Global and Domestic Clientele:
🔹It provides its products to valued customers in the domestic market & has a presence in 25+ countries worldwide.
⚡️Domestic Customers:
🔹Power grid
🔹Adani green power ltd
🔹Blue Star
🔹Siemens energy
🔹Tata Power
🔹Jindal Steel& Power etc.

⚡️International Presence:
🔹The company has a worldwide presence, serving customers in Asia, Europe, Oceania, North America, South America, and Africa.

🔶Key Highlights:
🔹The company holds a market share of 22-25% in power transformers.
🔹A pioneer in V-Connect & Scott-Connect railway transformers and the exclusive manufacturer for Green Hydrogen Energy transformers.
🔹The Co holds a BBB+ credit rating with a stable outlook.

🔹The company has excelled in producing transformers above 220 kV, with the percentage rising from 25% in FY19 to 66% in FY23.
🔹The company secured ₹120 Cr through a preferential issue, strengthening its operational capital.
🔹Promoter Share Holding stayed at 74.91%.

🔶Q2FY24 Financial Highlights:
🔹Revenue from Operations at ₹257.06 Cr⬆️65% QOQ and ⬇️21% YOY.
🔹Operating Profit at ₹19.68 Cr⬆️350% QOQ and⬇️42% YOY.
🔹PAT at ₹1.89 Cr⬆️115% QOQ and⬇️85% YOY.
🔹EPS at ₹0.12⬆️113% QOQ and⬇️86% YOY.

🔶Industry Outlook:
🔹Transformer market poised for significant growth due to federal investments in renewable energy and infrastructure improvement.
🔹India ranks third globally in electricity generation, with over 416 GW installed capacity as of March 31, 2023.

🔹The country plans to reach 450 GW of installed renewable energy capacity by 2030, with 280 GW (over 60%) expected from solar power.
🔹The ambitious target of 450 GW will provide investment opportunities worth US$ 221 billion by 2030.

🔶Future Outlook:
🔹Expected an order book of ~₹2,500 Cr by the end of the financial year.
🔹Aims for 450 GW renewable energy capacity by 2030, with a focus on solar.
🔹Expecting improvement in EBITDA margins as revenue increases.
🔹Finance cost expected to decrease in H2FY24.