A few links about Transformers and Rectifiers India Ltd
Click to access Presentation-Q2-2015-final.pdf
Quarter results are not great. Company making losses.
Copper prices have taken a hit and are expected to spiral downward. For 2013-14, TRIL had revenues more than Rs 700 Crs, raw material cost Rs 600 Crs (of which Rs 210 Crs was Copper, Rs 130 Crs Lamination and Rs 60 Crs Transformer Oil). The coming 3 years, this company is going to see a substantial reduction in raw material cost.
And finally, the big one. The much awaited T&D boom.
BUY without fear. At a market cap of Rs 220 Crs, CMP of Rs 170, trading below book value, debt of Rs 150 Crs and a company that gets 70% of its orders from government agencies (check 2nd link slide 9), Transformers and Rectifiers India Ltd is the mother of all value stocks!
thepokaranmoneymanager 
Hi Pokaran, in your last blog on TRIL you had mentioned below on TRIL –
” Rs 1000 Crs of expected revenue and 10% expected PAT margins, the company can expect a P/E valuation of 15x, taking its market cap to Rs 1500 Crs, a 6 fold increase from current valuations.”
Please help us know source of this estimate : is it management estimate (sales and margin) or proprietary analysis?
Many thanks.
This is not management estimate. Although in one of their annual reports, they talk about 35% Y-o-T growth which they have been unable to achieve. Doubling of revenues in sync with the T&D boom should be fairly straightforward, I believe.
Hi Pokaran, tried to scuttle butt a little but to no avail… was wondering why is Voltamp a profit making peer compared to TRIL??
The company has publicly stated a couple of times that they are in search of higher voltage orders and hence are having to give up on margins. Other than that, am not sure as to why Voltamp has better margins
Can I buy polyplex for longterm & capital first !
Both seem expensive
Sir, What about high P/E ratio of the company which is shown as around 55? Also referred a data site screener.in and below are the observations
Company has low interest coverage ratio.
The company has delivered a poor growth of 10.92% over past five years.
Company has a low return on equity of 1.90% for last 3 years.
Contingent liabilities of Rs.404.27 Cr.
Dividend payout has been low at 8.87% of profits over last 3 years
but the sales figure is increasing continuously. But the net profit peaked out in 2010.
Your input on the above would be really helpful
Thanks and regards
It is because of all those reasons that you are getting the stock so cheap.Copper prices have been very high for past few years. Plus, T&D boom did not really happen. These 2 factors are going to change in the next 3 years
As an industry insider, what is your views on Ujaas Energy? Thanks.
Not sure. But the stock doesnt look cheap.
I believe that Power Grid as a stock would outperform stocks like TRIL. Power grid had already done investments and now it’s time to reap return on investments and return due to economic uptrend and falling interest rates.
If you believe TRIL qualifies as value stock, you should definitely consider APAR INDUSTRIES. Time has come to replenish / replace transformer oil.
1) Apar trades at 3 times book 2) It has a lot of debt.More than Rs 800 Crs 3) TRIL`s 765 kVA are substantially value added products. Guess there are only 3-4 domestic producers who do this
there is also another player TD power sys …..who also has japnese tie up
Now comes the million dollar question. Say someone wants to go ahead putting all the surplus cash in either TRIL or NIIT. Which one would be life changing. Need a specific answer :). I know you dont give specific answer this kind of questions. But trying my luck here.
If you are ready to wait for 2 years, the TRIL is the one. Although NIIT is also a great stock, no doubt
Dear Arun, regarding the much anticipated boom in the T & D sector, if it becomes a reality how would you rate a small cap like Pitti Laminations?. Is it investment worthy? Seems to be having positive cash flows intermittently and growing top line with a debt equity ratio near 1:1.
Am glad that you asked me about Pitti Sir. Pitti will definitely benefit since they make laminates which are used in this segment. Pitti is a great company with excellent promoters. It has been sometime since I researched them. Let me do some updated research and get back.