Shares of Transformers & Rectifiers (India) Ltd hit the 20% lower circuit at Rs. 314.20 on the BSE in Monday’s trade, marking a sharp reversal in sentiment after the company reported a disappointing Q2FY26 performance. The decline came despite a broadly firm market, with the BSE Sensex up 0.15% at 83,339, suggesting stock-specific pressure following earnings that missed expectations on both profitability and margin metrics.

For the September quarter (Q2FY26), TARIL reported flat revenue at Rs. 460 crore, while EBITDA dropped 26% YoY to Rs. 52 crore and net profit fell 19% to Rs. 37 crore, reflecting the impact of higher employee costs and weaker operating leverage. EBITDA margin contracted 380 bps YoY to 11%, and PAT margin shrank 180 bps to 8%, compared to 14.4% and 10% respectively in the same quarter last year. The results have raised concerns about near-term earnings recovery, especially as the company’s profitability remains sensitive to cost inflation and delayed project execution.

Despite the soft quarter, TARIL’s order book remains robust at Rs. 5,472 crore, up from Rs. 5,246 crore in Q1FY26, supported by new orders worth Rs. 592 crore received during the period. The company also has bid prospects of over Rs. 18,700 crore, indicating a strong pipeline from the government’s ongoing transmission and distribution (T&D) infrastructure push. However, execution remains a key monitorable, as slower conversion of the order backlog has weighed on earnings momentum over recent quarters.

The stock, which has more than halved from its 52-week high of Rs. 650.23 (Jan 2025), hit a new 52-week low today, breaking below its previous low of Rs. 355.15 from March 2025. Market participants said the steep correction reflects profit-taking after a multi-quarter rally despite the company’s strong positioning in the domestic power equipment sector.

Analysts noted that while Transformers & Rectifiers’ medium-term outlook remains linked to India’s power grid expansion and renewable integration, near-term performance will depend on its ability to accelerate order execution, control costs, and improve cash flow efficiency.