Transformers and Rectifiers shares rise 30% in 2 sessions. What’s behind the sharp increase?

Shares of Transformers and Rectifiers rose as much as 11% to the day’s high of Rs 312 on December 15, extending gains for the second straight session and rising an impressive 30% over the same period. The sharp recovery was driven by value buying at lower levels as the shares continue to recover from the 52-week low of Rs 230 hit last week on Thursday, December 11. Despite the recent rebound, shares remain under pressure, down about 8% in the past month and almost 50% so far this year.

The stock crisis started last month after the company reported a weak set of numbers for the quarter ending September 30. During the quarter under review, the company’s consolidated net profit stood at Rs 37.45 crore, marking a sharp decline of almost 20% from Rs 46 crore reported in the same quarter of the previous fiscal.

Operating income for the second quarter stood at Rs 460 crore, little changed from the Rs 461 crore reported in the second quarter of the previous fiscal. EBITDA or earnings before interest, taxes, depreciation and amortization stood at Rs 65.44 crore, down 19% from Rs 81 crore in the corresponding quarter of the previous year.

EBITDA margins fell 330 basis points to 13.81%, compared to 17.1% in the second quarter of FY25, Transformers and Rectifiers’ investor presentation showed. One basis point is defined as one hundredth of one percentage point (0.01%).

Earlier this month, the company received a Rs 53-crore order from Power Grid Corp for supply of HVDC converter transformers. “This is an order for HVDC converter transformers, making the company the first private sector player in India to win such a contract. The project also supports the Government of India’s ‘Make in India’ initiative and will enable domestic consumers to source HVDC transformers from an indigenous manufacturer,” the report said.

At around 11.50 am, the company’s shares were trading at Rs 305, up 8.5% from the last close on the NSE. (Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of the Economic Times)