Shares of Transformers and Rectifiers (India) Ltd. declined as much as 10% on Wednesday, April 22, following disappointing Q4FY26 results that fell short of market expectations. According to reports from CNBC TV18, the stock was last trading 8.96% lower at ₹303.45, despite showing a 13% gain over the past month. The sharp decline reflects investor concerns over margin pressures and weak order trends that have weighed on the company's performance.
The company's Q4FY26 results showed mixed performance with revenue growth offset by margin compression. As reported by CNBC TV18, revenue rose 15.7% YoY to ₹782.67 crore compared with ₹676.48 crore in Q4FY25. However, EBITDA declined 9.79% YoY to ₹118.44 crore from ₹131.30 crore, leading to a significant contraction in EBITDA margin to 15.13% from 19.41% a year ago. Profit after tax (PAT) stood at ₹91.4 crore, slightly lower than ₹94.2 crore in the year-ago quarter, showing a 2.97% YoY decline.
The company's margin compression was primarily driven by significant cost increases, particularly in employee expenses. According to CNBC TV18, margins fell to their lowest level since Q2FY25, impacted by a sharp 64% YoY increase in employee costs. This substantial cost inflation has been a key factor in the company's inability to maintain profitability levels despite revenue growth, highlighting operational challenges in the current business environment.
The company's order book position remains significantly below management guidance, indicating continued demand challenges. As reported by CNBC TV18, the FY26 order book stood at ₹5,005 crore, significantly below its guidance of ₹8,000 crore. For FY27, management has provided guidance for revenue of ₹3,200 crore and EBITDA margins in the 15-17% range. During the post-earnings call, management indicated that commissioning of the Changodar/Moraiya plant has been deferred to Q2-Q3FY27.
Despite operational challenges, the company has made progress on strategic initiatives that could improve future prospects. According to CNBC TV18, the company has submitted its response to the World Bank and expects feedback within the next 45 days. Management anticipates being empanelled in the near term, which would enable participation in upcoming HVDC tenders, potentially improving order inflows and revenue visibility going forward.
