Shares of Transformers and Rectifiers (India) Ltd (TARIL) were among the top gainers on the BSE on Thursday, extending recovery from recent lows after heavy correction over the past two months. The stock opened flat at Rs.289.30 and surged to hit its upper circuit of Rs.318.25, up over 10% intraday, with a VWAP of Rs.314.09 and a market capitalisation of Rs.9,552 crore. At current levels, the stock remains down nearly 45% from September highs, indicating that much of the recent negativity may already be factored in.

The decline followed a series of developments, including the World Bank’s debarment of TARIL on November 4, from participating in Bank-funded projects over alleged procedural issues related to a 2019 contract for Transmission Company of Nigeria Plc (TCN), worth USD 25 million. The company clarified that the project was completed successfully in FY22, with final payments received in Q1FY26, and that the action carries no financial or operational implications. TARIL said none of its current or upcoming orders involve World Bank funding, though it intends to respond to safeguard its corporate governance standing.

Adding to near-term pressure, the company’s Q2FY26 results were subdued, with revenue flat YoY at Rs.460 crore and net profit down 19% to Rs.37 crore, weighed by lower capacity utilisation (65%) and delayed material supplies, including continuously transposed conductors and bushings. EBITDA margin slipped due to operating deleverage and a Rs.3.8 crore ESOP expense, while EPS for Q2 stood at Rs.1.13, compared to Rs.3.4 for H1FY26. Management has revised its FY26 revenue target to Rs.2,600 crore (from earlier 56% YoY growth guidance) and expects 16% EBITDA margin, with temporary delays in capacity expansion at its Moraiya and Changodar plants.

However, the order book remains robust, standing at Rs.5,500 crore after fresh orders worth Rs.103 crore announced on November 19, with Rs.18,700 crore of inquiries under discussion -  85 to 90% of which are domestic. The company reiterated its guidance for an FY26-end order book of Rs.8,000 crore, and long-term revenue goal of USD 1 billion by FY29. Backward integration initiatives such as CRGO manufacturing are expected to add 250 bps to margins from Q1FY27 onwards, improving competitiveness.

Mr.SP Tulsian is of the opinion that TARIL’s long-term fundamentals remain intact, supported by its position as India’s largest private transformer manufacturer, a net debt-free balance sheet, and favourable industry tailwinds from India’s transmission network expansion. While recent volatility may continue near term, the recovery in order inflows and structural demand visibility could help the stock stabilise at current levels.