Changodar expansion drags revenue, while margin recovers in Q1FY27
Revenue fell 26.87% sequentially as lower plant utilisation affected throughput, but operating margin improved 1.17 percentage points to 16.31%.
Filed 20 Jul 2026, 18:21 IST · after market close · Transformers & Rectifiers India Ltd (TARIL)
Key takeaways
- Q1FY27 consolidated revenue fell 26.87% QoQ as Changodar expansion reduced operational throughput, management said.
- Operating margin recovered 1.17 percentage points to 16.31% because expenses fell faster than revenue, although other income contributed 18.53% of pre-tax profit.
- The stock fell 5.02% on the first trading day after results, broadly matching its 5.00% median historical post-results move.
Price around the results
Changodar throughput drove the sequential revenue decline
Transformers & Rectifiers India reported consolidated revenue of Rs 572.34 cr in Q1FY27, down 26.87% QoQ, while operating profit declined 21.22% to Rs 93.34 cr. Management said ongoing expansion activities at the Changodar plant lowered capacity utilisation and affected operational throughput. The company also said its unexecuted order book is expected to be executable over the coming 18-24 months.
Lower expense growth lifted margin, but profit quality was mixed
Expenses fell 27.88% QoQ, faster than the 26.87% decline in revenue, which widened operating margin by 1.17 percentage points to 16.31%. Other income was 18.53% of pre-tax profit, making it a material contributor to reported earnings. The tax rate rose 3.47 percentage points to 26.97%, while interest expense increased 2.99%, and net profit therefore fell 29.65% to Rs 64.29 cr.
Margin recovered after Q4 dip and remains above the sector median
Operating margin rose from 11.20% in Q2FY26 to 16.96% in Q3FY26, slipped to 15.14% in Q4FY26, and recovered to 16.31% in Q1FY27. It was 4.42 percentage points above the 11.89% median among 288 Industrials peers that had reported the same quarter. There is no year-on-year comparison in the reported results.
Management points to capacity expansion and raw-material risks
Management said the Rs 150 cr Changodar expansion and Rs 900-1,000 cr backward-integration programme were progressing as planned. It said the Changodar project is expected to finish by August 2026, after which utilisation is anticipated to improve, while commercial commissioning of all backward-integration facilities is targeted by Q1FY28, allowing for a delay of up to one quarter. The company is targeting 25% FY27 revenue growth, a 16% EBITDA margin and a 9%-10% PAT margin, and flagged raw-material availability, supply-chain disruption and cost volatility as monitorables.
Initial market reaction was typical, but losses widened by day five
The stock fell 5.02% on the first trading day after the results, close to the 5.00% median absolute move across its previous eight results. The stock had risen after five of those results and fallen after three. Its decline reached 11.39% by the fifth trading day, making the later reaction weaker than the initial move.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ |
|---|---|---|---|
| Revenue | ₹572 cr | ₹783 cr | -26.87% |
| Other income | ₹16 cr | ₹22 cr | -27.09% |
| Expenses | ₹479 cr | ₹664 cr | -27.88% |
| Operating profit | ₹93 cr | ₹118 cr | -21.22% |
| Operating margin (%) | 16.31% | 15.14% | — |
| Interest | ₹15 cr | ₹14 cr | +2.99% |
| Depreciation | ₹7 cr | ₹7 cr | -2.71% |
| Profit before tax | ₹88 cr | ₹119 cr | -26.32% |
| Tax | ₹24 cr | ₹28 cr | -15.46% |
| Net profit | ₹64 cr | ₹91 cr | -29.65% |
| EPS (₹) | ₹2.05 | ₹3.04 | -32.57% |
Operating margin of 16.31% compares with a Industrials sector median of 11.89% across 288 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -5.02% | -4.81% |
| Next session | -7.93% | — |
| 5 sessions | -11.39% | -10.35% |
| 15 sessions | -10.94% | — |
| 30 sessions | -7.40% | — |
Volume on the results session was 1.19× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company is targeting 25% revenue growth, a 16% EBITDA margin and a 9%-10% PAT margin in FY27.
- The un-executed order book is expected to be executable over the coming 18-24 months.
- The company says its existing and expanded capacities support its growth objectives without additional capacity constraints.
Expansion
- The Changodar expansion is expected to finish by August 2026, after which utilization is anticipated to improve.
- Changodar expansion of ₹150 crore and backward integration of ₹900-1,000 crore are progressing according to plan.
- Commercial commissioning of all backward-integration facilities is targeted by Q1 FY28, allowing for a delay of up to one quarter.
- Expanded transformer manufacturing capacity supports a revenue potential of ₹5,000-6,000 crore.
Problems & risks
- Lower capacity utilization at the Changodar plant affected quarterly revenue growth because expansion activities reduced operational throughput.
- Availability of critical raw materials and unforeseen geopolitical disruptions remain key monitorables.
- The global transformer market faces supply-chain and lead-time issues.
- The global transformer market faces high raw-material cost volatility.
- The global transformer market faces a limited number of component suppliers.
What to watch
- Whether operating margin holds above 16.31% as Changodar utilisation improves.
- Progress toward management's 25% FY27 revenue-growth target after the Q1FY27 decline of 26.87% QoQ.
- Execution of the 18-24 month order book without disruption from raw-material availability and supply-chain issues.