This Power Sector Stock Grew 705.66% In 3 Years, Buy For Strong 35% Upside, Says ICICI Direct

ICICI Direct, a leading brokerage firm, has given a buy call to Transformers and Rectifiers India Limited (TRIL) for a target price of Rs 645 apiece. If you purchase the stock at the current market price it would yield 35% positive returns. TRIL is a small cap Power sector stock having a market capitalisation of Rs 849.07 crore.

The current market price (CMP) of TRIL is Rs 64.05/share, fallen 2.14% from its previous close. The stock touched its 52-week high at Rs 67.40/share on 28 October 2022 and 52-week low at Rs 25.05/share on 20 June 2022, respectively.

In the previous 1 week, it has grown 13.56%, whereas in the past 1 month, it grew 13.87%, respectively. In the last 1 year, the stock has surged 81.44%. It gave a massive 705.66% return in the last 3 years. In the last 5 years, it gave 51.6% positive returns, respectively.

For Q2FY23, TRIL posted strong results. Consolidated revenue grew 15.1% YoY to Rs 307.5 crore. EBITDA grew strongly by 60.6% YoY to Rs 34.2 crore with margins of 11.1% vs. 8% in Q2FY22. Consequently, PAT came in at Rs 12.2 crore, up 122.2% YoY.

After many years of stagnant performance, growth prospects are looking bright across all parameters. Revenue CAGR of 20% in FY22- 24E coupled with margins hitting 10.8% in FY24E will enable TRIL to post its best ever profitability performance. "We initiate coverage under I-Direct Nano format with a BUY rating. We value TRIL at Rs 86 i.e. 15x on FY24E EPS," ICICI Direct said.

According to the brokerage the key triggers are:

Transformer and Rectifier India (TRIL) is a leading manufacturer of transformers up to 1200 kV class. TRIL has a wide range of transformers, like power & distribution transformers, furnace transformers, rectifier transformers & special transformers. It has strong in-house design & technical expertise; combined with technical collaboration/JV relationship for 765 kV transformers & reactors.

A diversified customer base in India, coupled with an international presence in over 20 countries. Total 50% revenue comes from utilities (like state electricity boards, PGCIL, Railways), 44% comes from industrials that includes renewables and 6% exports including third party exports - utilities & power.

The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.