ECONOMIC OVERVIEW: GLOBAL AND INDIAN ECONOMY
In FY 2025-26, TARIL operated against a backdrop of exceptional complexity: a global economy navigating armed conflict in the Middle East, an accelerating energy transition, and divergent monetary cycles across major economies. India stood out as a rare bright spot: the fastest-growing large economy in the world, investing heavily in its own productive capacity. Understanding this macro environment is essential to understanding both the pressures the Company absorbed during the year and the structural tailwinds that underpin its multiyear growth thesis.
1.1 THE GLOBAL ECONOMY
The defining feature of the global economy in FY 2025-26 was conflict, not trade. The International Monetary Funds World Economic Outlook of April 2026, titled Global Economy in the Shadow of War, projected global growth at 3.1 percent in 2026 and 3.2 percent in 2027, a meaningful downgrade from the January 2026 forecast. The Fund attributed this revision primarily to the outbreak of war in the Middle East, which disrupted energy markets, elevated commodity prices, and injected a new layer of uncertainty into business investment worldwide.
The IMFs reference scenario assumed a shortlived conflict and a moderate 19 percent rise in energy prices in 2026, under which global headline inflation was projected to rise to 4.4 percent before resuming its decline in 2027. The Fund explicitly flagged downside risks, warning that disruption around the Strait of Hormuz and damage to critical energy facilities could precipitate a wider energy crisis. Under its adverse and severe scenarios, global growth could fall to 2.5 percent and 2.0 percent respectively levels that would sharply curtail the infrastructure investment from which TARIL benefits.
Beyond the conflict, the structural landscape of the global economy remained shaped by several forces directly relevant to a transformer manufacturer. First, the energy transition continued to accelerate: the International Energy Agency reported in its World Energy Outlook 2025 that global clean-energy investment surpassed US$2 trillion for the first time, and that grid infrastructure investment needed to at least double by 2030 to keep pace with renewable capacity additions. Second, global electricity demand grew at the fastest rate in two decades, driven by EV charging, data centre expansion, and industrial electrification all of which are transformer-intensive. Third, the global transformer supply chain remained structurally tight: lead times for large power transformers extended to 80 to 100 weeks in North America and Europe, creating a structural export opportunity for high-quality Indian manufacturers.
Geopolitical fragmentation added both cost pressure and opportunity to this picture. US tariff tensions with China, which had dominated the preceding year, partially eased for India, with the IMF noting a reduction in additional United States tariffs on Indian goods that improved the trade competitiveness of Indian exports. At the same time, raw-material costs remained volatile: LME copper averaged above US$9,500 per tonne through much of the year, grain-oriented electrical steel prices stayed elevated as CRGO supply remained concentrated in a handful of producers globally, and transformer oil tracked energy commodity movements upward. For a company that counts copper and CRGO steel as its two largest input cost lines, this external environment was both a demand accelerant and a margin headwind.
1.2 ADVANCED ECONOMIES: DIVERGENT CYCLES
The worlds three largest economies moved at different speeds in FY 2025-26. The United States grew at approximately 2.3 percent, supported by resilient consumer spending and a technology- led investment boom, though the Federal Reserve maintained a cautious stance through much of the year before beginning to ease in late 2025 as inflation fell towards its 2 percent target. The Eurozone expanded at a more modest 1.1 percent, weighed down by Germanys industrial transition, energy costs, and subdued export demand from China. Japan grew at roughly 1.4 percent, with the Bank of Japan tentatively exiting its ultra-loose monetary policy as wage growth finally became entrenched.
For TARIL, the most commercially significant development in advanced economies was the acceleration of grid-modernisation investment. The United States Infrastructure Investment and Jobs Act, its Inflation Reduction Act, and the European Unions REPowerEU and Green Deal Industrial Plan collectively committed trillions of dollars to electricity infrastructure over this decade. The US Department of Energy estimated a grid-investment gap of US$50 billion over the next decade for transformers alone, driven by the age of existing equipment, EV load growth, and renewable integration. This creates a structural, policy-backed export market for Indian transformer manufacturers, one that TARIL, with its 40-plus country export footprint and demonstrated high-voltage capability, is well placed to serve as capacity expands.
1.3 EMERGING MARKETS AND THE CHINA DIMENSION
Chinas economy grew at approximately 4.6 percent in calendar 2025, slightly below its 5 percent target, with property sector weakness persisting even as the government accelerated infrastructure investment, particularly in its grid and in renewable energy. Chinas State Grid and Southern Grid together invested over RMB 600 billion in grid infrastructure in 2025, representing a global benchmark for the scale of investment that energy transition demands.
Crucially for the Indian transformer industry, Chinas own transformer demand is being met almost entirely domestically by manufacturers such as TBEA, Sinovel and China XD Group. This means Chinese capacity is unavailable to ease the global supply tightness, and Indian manufacturers do not face direct Chinese export competition in their key end-markets. Meanwhile, South Asia, Southeast Asia, the Middle East and Africa represent under-penetrated export markets where Indian transformer manufacturers, including TARIL, are building presence.
1.4 THE INDIAN ECONOMY: A YEAR OF ACCELERATING GROWTH
Against a softer global picture, India stood out with exceptional force. According to the Provisional Estimates of National Income released by the Ministry of Statistics and Programme Implementation (MoSPI) on 5 June 2026, real GDP grew 7.7 percent in FY 2025-26, accelerating from 7.1 percent in FY 202425 Indias best performance in three years. Real GDP reached Rs.323.12 lakh crore at constant 2022-23 prices, and nominal GDP grew 8.9 percent, expanding the tax base and supporting the governments capacity to fund infrastructure. Growth was broad-based and durable, with Q4 FY26 real GDP rising 7.8 percent year-on-year, confirming no loss of momentum into the year-end.
For the Company, the most significant sectoral data points were: the manufacturing sector recording double-digit growth of 10.7 percent in FY26, reflecting the deepening of Indias industrial base; and gross fixed capital formation, the investment engine that drives demand for power infrastructure rising 8.2 percent. This is precisely the demand environment a capital-goods manufacturer requires: an economy that is not merely consuming more electricity but investing at scale in the productive capacity to generate, transmit and distribute it.
The IMF, in its April 2026 World Economic Outlook, singled out India as the fastest-growing major economy, raising its forecast for Indias FY 2026-27 growth to 6.5 percent on the strength of carryover momentum, resilient domestic demand, and improved trade conditions, including the easing of US tariff friction. This forward projection, alongside the RBIs own growth projection of 6.6 percent for FY27, underpins a sustained domestic demand environment for TARILs products well into the medium term.
1.5 MONETARY POLICY: FROM NEUTRAL TO SUPPORTIVE
Monetary policy turned supportive through the year in a manner that directly benefited the Company. The Reserve Bank of Indias Monetary Policy Committee began FY26 with a 25 basis-point cut to the policy repo rate at its April 2025 meeting, bringing it to 6.00 percent, and continued its easing cycle with a further reduction in December 2025 to 5.25 percent. This represented a total easing of 75 basis points during the year, taking the repo rate to its lowest level since 2022, and the MPC maintained a neutral stance into the first quarter of FY27.
Lower policy rates fed through to the Companys own cost of funds. Standalone finance costs fell to Rs.44.92 crore from Rs.48.38 crore even as working- capital borrowing rose, a combination that would not have been achievable without the interest-rate tailwind. For FY27, lower rates also ease the cost of the working-capital normalisation the Company is undertaking, and make the incremental cost of funding the remaining capex programme more manageable. The RBI has projected GDP growth moderating to 6.6 percent in FY 2026-27, citing geopolitical risk in West Asia and monsoon uncertainty as the principal domestic risks to the forecast.
1.6 FISCAL POLICY AND THE INFRASTRUCTURE MANDATE
Fiscal policy is the single most important macro variable for TARILs demand outlook, because the national transmission build-out is a direct function of government capital expenditure. The Union Budget for 2026-27, presented on 1 February 2026, reaffirmed and extended the governments capital- expenditure-led growth strategy. Public capital expenditure was raised to Rs.12.22 lakh crore for FY 2026-27 from TI1.2 lakh crore in the FY 2025-26 budget estimates, and effective capital expenditure including grants to states and union territories was set at T17.1 lakh crore, equivalent to 4.4 percent of GDP, while the fiscal deficit was budgeted at 4.3 percent of GDP.
Within this aggregate, the power sector was a priority. Allocation to the Ministry of Power and to renewable energy programmes continued at an elevated level, and the governments Viksit Bharat 2047 vision, which frames Indias aspiration to become a developed nation by the centenary of independence, keeps infrastructure investment as a structural priority for the next two decades. The Companys own Chief Financial Officer explicitly linked the FY26 performance and the forward outlook to "the infrastructure push by the Government through Budget 2026 and Viksit Bharat 2047," underscoring how directly the Companys order pipeline is tied to public capital formation.
| Macro Indicator | FY 2025-26 Actual | FY 2026-27 Forecast | Relevance to TARIL |
| India Real GDP Growth | 7.7% | 6.5% (IMF) / 6.6% (RBI) | Drives investment in power infrastructure |
| Manufacturing Sector Growth | 10.7% | 9-10% (est.) | Lifts industrial transformer demand |
| Gross Fixed Capital Formation | +8.2% | Sustained | Direct driver of T&D capex |
| Union Budget Capex (Centre) | Rs.11.2 lakh crore | Rs.12.22 lakh crore | Funds grid build-out |
| Effective Capex (incl. grants) | Rs.16.0 lakh crore | T17.1 lakh crore (4.4% GDP) | Broad infrastructure pipeline |
| RBI Repo Rate | 5.75% + 5.25% | 5.00-5.25% | Lowers cost of working capital |
| Global Growth (IMF) | 3.2% | 3.1% | Shapes export market |
| LME Copper (avg.) | US$9,500/t | Elevated with volatility | Primary input cost risk |
1.7 GEOPOLITICAL AND COMMODITY DEVELOPMENTS
Two geopolitical threads ran through FY26 with direct relevance to TARIL. First, the Middle East conflict and associated rise in energy prices created an input-cost headwind: commodity and energy market volatility fed through to copper prices, transformer oil and logistics costs, and is the macro origin of the Companys in-year margin pressure. The IMFs downside scenario, in which a wider energy crisis cuts global growth to 2.0 percent, remains a risk for FY27, though the Funds reference scenario is more benign.
The second thread was more positive: the easing of United States tariff friction on Indian goods and the acceleration of grid-modernisation investment in North America and Europe opened a structural export window for Indian transformer manufacturers at precisely the moment TARIL is building the high- voltage and HVDC manufacturing capabilities needed to serve those markets. Net-net, the macro picture is favourable on demand and mixed on cost: an India investing at scale in power infrastructure, a supportive monetary and fiscal environment, and an external cost base made more volatile by conflict but partially offset by export opportunity.
INDUSTRY STRUCTURE AND DEVELOPMENTS
TARIL operates in a single industry the manufacture of power, furnace, rectifier, distribution and specialty transformers and reactors and this section examines that industry in depth. What is striking about FY 2025-26 is that the India transformer industry moved from being a beneficiary of a cyclical upturn to being a structural participant in a nationally mandated super-cycle, with investment targets large enough, and policy backing firm enough, to sustain demand for a decade or more.
2.1 INDUSTRY SIZE AND THE DEMAND SUPER-CYCLE
Indias transmission and distribution equipment industry is at the beginning of a multi-year investment super-cycle, and the scale is now officially quantified. The National Electricity Plan (Volume II, Transmission), launched by the Central Electricity Authority in October 2024, commits over Rs.9.15 lakh crore approximately US$96.7 billion to transmission investment through 2032. This investment mandate is not aspirational: it is embedded in the National Electricity Policy framework and is being executed through PGCIL, state transmission utilities, and private transmission licensees.
The Plan sets out specific capacity targets: grid transformation capacity is to rise from approximately 1,429 GVA as on February 2026 to 2,345 GVA by 2032, representing an addition of some 916 GVA of transformer capacity. Transmission lines are to expand from about 5.04 lakh circuit kilometres to 6.48 lakh circuit kilometres. Inter-regional transfer capacity is to grow from 120 GW to 168 GW to enable the movement of renewable power from generation-surplus states to demand centres. Nine High Voltage Direct Current links with a combined capacity of 33.25 GW are planned, including the Khavda-Nagpur-Pune HVDC corridor, one of the largest renewable energy transmission projects in the world. The Central Electricity Authority has separately estimated that India needs to add 776,330 MVA of transformer capacity by FY27, taking total installed transformation capacity towards 1.85 million MVA.
Indias current transformer manufacturing industry, with an estimated installed capacity of around 450,000 MVA, is already operating at high utilisation rates across higher-voltage categories. The gap between industry capacity and the Plans demand trajectory is the commercial foundation on which every major transformer companys expansion is being built, and it is the reason that order books industry-wide are the largest in a generation.
2.2 MARKET SIZE AND STRUCTURE
Indias transformer market is estimated by industry observers at approximately Rs.60,000 to Rs.70,000 crore (US$7-8 billion) in FY26, having grown at a compound annual rate of approximately 18-20 percent over the preceding three years. The market is typically disaggregated by voltage class, product type and end-customer.
By voltage class, the market is segmented broadly into: distribution transformers (up to 33 kV), which represent the highest volume in units but are commoditised and margin-thin; power transformers (66 kV to 220 kV), where a larger number of manufacturers compete; and extrahigh-voltage (EHV) and ultra-high-voltage (UHV) transformers (400 kV and above), where only a small number of technically qualified manufacturers can compete. Specialty products furnace transformers, rectifier transformers, traction transformers, HVDC converter transformers constitute a further, high- margin niche category.
By end-customer, demand is driven by: central transmission utilities (PGCIL and its subsidiaries), which execute the inter-state transmission network; state transmission utilities (STUs) and DISCOMs, which build and maintain state grids; EPC contractors who aggregate demand from utilities and industrial customers; and industrial customers in metals, cement, petrochemicals, railways, mining and data centres who buy transformers for captive use. The central and state utility segments are the largest and most cyclically durable demand sources, and TARILs order book reflects this utilities accounted for approximately 44 percent of the unexecuted order book as at December 2025 and approximately 56 percent of in-year revenue.
2.3 STRUCTURAL TRENDS RESHAPING THE INDUSTRY
The voltage and complexity upgrade. The single most important structural trend is the migration of demand up the voltage and complexity curve. The National Electricity Plans 33.25 GW HVDC programme, its 765 kV and 800 kV AC backbone corridors, and the large generator transformers needed for thermal and nuclear additions all require increasingly sophisticated engineering. As voltage class rises, the number of qualified manufacturers falls sharply, realisations per MVA climb, and EBITDA margins widen from approximately 10-13 percent for distribution transformers to 16-20 percent for large power transformers, and 25 percent or more for specialised products. This trend is directly aligned with TARILs product roadmap and technology positioning.
Renewable energy integration demand. Solar and wind capacity additions India added over 30 GW of renewable capacity in FY26, maintaining its position as the worlds third-largest renewable market requiring significant transformer infrastructure. Grid-forming converters, large solar park pooling transformers, offshore wind array and export transformers, and phase-shifting and series reactors for grid stabilisation are all growing categories. The Green Energy Corridors, which connect renewable- rich western states (Rajasthan, Gujarat) with eastern demand centres, are major transformer and reactor consumers. TARILs solar-application, green- hydrogen-application and reactor product lines are positioned directly in this demand stream.
Supply-side tightness and extended lead times.
Across all higher-voltage categories, production lead times have extended significantly as manufacturers operate at or near full capacity. Utilities and EPC contractors are being advised of 18-24-month lead times for 400 kV and above transformers, and 24-30 months for specialty products. This supply constraint benefits established, high-capacity manufacturers with proven type-testing credentials, as customers cannot simply switch suppliers without restarting procurement and approval processes. It also incentivises early ordering and long-term supply arrangements, deepening the existing order-book advantage of market leaders.
Global grid-replacement export opportunity. North America and Europe are facing a simultaneous transformer replacement cycle driven by the ageing of infrastructure installed in the 1970s and 1980s, compounded by the demands of electrification and renewable integration. The Edison Electric Institute has estimated that the United States alone faces a shortage of large power transformers in the order of millions of units over this decade. Indian manufacturers who can produce to ANSI/IEEE, IEC and IS standards at competitive cost are increasingly qualifying as suppliers to US and European utilities. TARILs 40-plus country export footprint, its Fuji Electric technology licence and its expanding high-voltage credentials position it to grow this channel significantly.
Industrial electrification. Beyond utility demand, the electrification of industry electric arc furnaces replacing blast furnaces in steel, electric kilns in cement, electric boilers in process industries, and electric drives in mining and oil is generating a structural wave of demand for specialty transformers. TARILs furnace-transformer franchise, which includes among the worlds largest EAF transformer ratings, is a direct beneficiary of this trend, and the Companys industrial customer base includes the largest Indian steel, mining and process companies.
2.4 COMPETITIVE LANDSCAPE
The Indian transformer industry comprises a small tier of high-capability, full-range manufacturers and a much larger number of lower-voltage specialists. The tier of companies capable of serving the 400 kV and above market with reliable, tested products is limited to: Hitachi Energy India (formerly ABB Power Products), which reported an order backlog above Rs.29,500 crore as at March 2026 and is the market leader by capability; TARIL, which competes across the 110 kV to 1200 kV range and claims the highest-AC-voltage transformer dispatched in the world; BHEL, which serves the utility segment primarily for its own projects; CG Power and Industrial Solutions; and Sterlite Powers Kalpataru transformer subsidiary.
At the mid-voltage level (66 kV to 220 kV), the competitive set broadens to include Voltamp Transformers, Shilchar Technologies, Atlanta Electricals, Indo Tech Transformers, and a range of state-level manufacturers. Competition at the 220 kV and below level is intense and margin- dilutive; TARILs deliberate strategy of moving up the voltage curve and prioritising high-margin, niche and specialty products is, in part, a competitive response to this pressure. TARILs HVDC converter-transformer repair order from PGCIL is a particularly significant competitive moat: it is the first such order to an Indian company, and successful completion will generate a manufacturing approval that very few competitors could claim.
2.5 POLICY AND REGULATORY DEVELOPMENTS DURING FY26
Policy during FY26 reinforced the demand pipeline from multiple directions. The Union Budget 202627 lifted public capital expenditure to Rs.12.22 lakh crore and effective capital expenditure to TI7.1 lakh crore. The Revamped Distribution Sector Scheme (RDSS) continued to push DISCOMs to modernise their networks and reduce AT&C losses, generating demand for distribution and medium-voltage transformers. The Green Energy Corridor Phase II programme, under the Ministry of New and Renewable Energy, funded evacuation infrastructure. The Bureau of Energy Efficiency tightened energy-efficiency standards for distribution transformers, which effectively raises the technical floor of acceptable products and benefits established manufacturers with robust testing capabilities.
A noteworthy demand-side nuance, highlighted in an April 2026 industry assessment drawing on Motilal Oswal research, is that utility ordering activity saw a temporary pause in FY26, with fewer transmission schemes awarded than in the prior year. This slowdown was attributed to execution constraints utilities absorbed in executing previously awarded schemes rather than floating new ones rather than any weakening of underlying demand. This distinction is important: TARIL simultaneously reported record revenue, its largest-ever order book, and a deliberate decision to pace fresh order intake, all of which are entirely consistent with an industry in strong demand where execution is the binding constraint.
2.6 INDUSTRY OUTLOOK AND TARILS POSITIONING
The industry outlook for the next three to five years is highly favourable by any reasonable assessment. The NEPs Rs.9.15 lakh crore commitment, the renewable integration mandate, the export opportunity, and the industrial electrification trend together create a demand environment without historical precedent in Indian infrastructure.
The constraint is supply-side and execution-side, not demand. Within this environment, TARILs positioning is strong: it competes in the highest- value, most supply-constrained segments; it holds technology credentials (Fuji licence, ZTR alliance, NABL accreditation, HVDC repair order) that create genuine barriers to entry; and it has invested Rs.600 crore in capacity expansion at exactly the right moment in the cycle.
COMPANY OVERVIEW
Transformers & Rectifiers India Limited is not a company that merely participates in Indias power infrastructure story; it was built alongside it. The Companys four-decade journey from a transformer repair shop in Ahmedabad to a Rs.2,500 crore organisation with products operating at the worlds highest AC voltages is, in miniature, the story of Indias own industrial transformation.
3.1 FOUNDING STORY AND CORPORATE EVOLUTION
The Company traces its origins to 1981, when Mr. Jitendra U. Mamtora moved from repairing transformers to manufacturing 33 kV class units. The corporate entity was incorporated on 11 July 1994 as Triveni Electric Company Limited and was renamed Transformers and Rectifiers (India) Limited in 1995, beginning manufacture of up to 110 kV class transformers at its Changodar plant,
Ahmedabad. The Company listed on the NSE and BSE in 2008, raising Rs.139 crore at Rs.465 per share, and commissioned its greenfield plant at Moraiya in 2010.
Over the following years the Company built genuine technological depth: a strategic alliance with ZTR, Ukraine, for 765 kV transformer technology; a technology-licence agreement with Fuji Electric of Japan for 400 kV and 765 kV class reactors and generator transformers; the commissioning of a 1150
kV transformer; and the development of electric arc furnace and green-energy transformers. Between 2024 and 2026, the Company raised Rs.500 crore through a qualified institutional placement, secured its then-highest single order of Rs.740 crore from GETCO, completed a strategic backward-integration acquisition, received the landmark HVDC converter transformer repair order from PGCIL, and increased installed capacity from 40,000 MVA to approximately
75,000 MVA the most intensive investment phase in its history.
3.2 CORPORATE IDENTITY
| Identifier | Detail |
| BSE Code | 532928 |
| NSE Symbol | TARIL |
| ISIN | INE763I01026 |
| CIN | L33121GJ1994PLC022460 |
| 11 July 1994 (as Triveni | |
| Incorporated | Electric Company Limited) |
| Registered Office | Survey No. 427 P/3-4 & 431 P/1-2, Sarkhej-Bavla Highway, Village Moraiya, Taluka Sanand, District Ahmedabad - 382213, Gujarat |
| Statutory Auditor | Manubhai & Shah LLP, Chartered Accountants |
| Audit Opinion FY26 | Unmodified (standalone and consolidated) |
| Board Approval FY26 Results | 21 April 2026 |
3.3 BUSINESS AND PRODUCT PORTFOLIO
The Company operates a business-to-business model serving power generation, transmission, distribution and industrial customers across India and 40-plus countries. It reports a single segment of transformer manufacturing under Ind AS 108 and its product range spans:
? Power transformers: single-phase and three- phase units up to 500 MVA and the 1200 kV class, covering 33 kV to 1200 kV for grid applications
? Furnace transformers: electric arc furnace, ladle furnace and submerged arc furnace transformers, among the worlds highest ratings for EAF duty
? Rectifier and duty transformers: for aluminium smelters, electrochemical plants, HVDC stations and industrial drives
? Distribution transformers: 11 kV to 33 kV class units for DISCOM and rural electrification programmes
? Specialty transformers: locomotive traction units, solar-application transformers, green- hydrogen application transformers, earthing transformers, mobile substations
? Reactors: series and shunt reactors for reactive power compensation and grid stabilisation in renewable evacuation infrastructure
? HVDC converter transformers (in progress): repair and manufacturing approval pathway initiated through the PGCIL landmark order
These products serve a diversified set of end- markets: power generation (thermal, hydro, nuclear, solar, wind), power transmission (PGCIL, STUs), power distribution (DISCOMs, rural electrification), metals and mining (steel, aluminium, zinc, copper), chemicals and petrochemicals, cement, railways, pharmaceuticals, paper and pulp, data centres, and green hydrogen production.
3.4 MANUFACTURING FOOTPRINT AND INSTALLED CAPACITY
The Company operates three manufacturing plants, all within the Ahmedabad metropolitan region in Gujarat:
| Plant | Location | Specialisation | FY27 Capacity (est.) |
| Smaller distribution transformers — up to 66 | |||
| Odhav Plant | Odhav, Ahmedabad | kV class, 10 MVA units; the companys oldest/ original manufacturing site | 1200 MVA |
| Changodar Plant | Sarkhej-Bavla Highway, Ahmedabad | High-voltage power transformers, EHV class, type-testing facility | 37,000 MVA post expansion |
| Moraiya Plant | Sarkhej-Bavla Highway, Ahmedabad | Furnace, rectifier, distribution and specialty transformers | 40,000 MVA post expansion |
| Backward-integration facility | Chiyada, Sarkhej-Bavla Highway, Ahmedabad | CTC wire, bushings, pressboard, structural fabrication | Component supply to both plants |
Total installed capacity rose from 40,000 MVA in FY24 to approximately 75,000 MVA by end of FY26, with additions of 22,000 MVA at Changodar and 15,000 MVA at Moraiya. Against this installed base, FY26 production reached a record 33,763 MVA, representing an utilisation rate of approximately 45 percent of the new total, a deliberate build- ahead-of-demand strategy. The NABL-accredited electrical-steel testing laboratory at Moraiya is the only such facility in the Indian transformer industry, reinforcing TARILs quality credentials.
3.5 GROUP STRUCTURE AND BACKWARD INTEGRATION
The consolidated Group comprises the Holding Company and six subsidiaries, each serving a specific backward-integration or capability-building purpose:
The subsidiaries together contributed Group revenue of Rs.113.31 crore and net profit of Rs.46.62 crore, reflecting investment and consolidation effects. The widening premium of consolidated over standalone margins consolidated EBITDA margin of 17.7 percent versus standalone 15.4 percent is the financial expression of this backward-integration strategy: margin that was previously paid away to third-party suppliers is now captured within the Group.
3.6 CUSTOMER BASE AND COMPETITIVE STRENGTHS
TARILs customer base spans a blue-chip and diversified set of marquee names across the power value chain. On the utility and transmission side, the Company counts PowerGrid Corporation of India (PGCIL), NTPC, GETCO, UPPTCL, RRVPNL, MPPTCL, and WBSECL among its long-standing customers, alongside numerous other state transmission utilities. Its industrial and renewables clientele includes Siemens Limited, the Adani group, Tata Power and other Tata group companies, ReNew Power, Aditya Birla Grasim, Torrent Power, Torrent Renewables, AVAADA Energy, JSP Green, Montecarlo, and Kalpataru. In steel, metals, and process industries, TARIL serves Jindal Steel & Power, JSW, SAIL, Hindustan Zinc, Jindal SAW, Shyam Metallic, and Gajanan Ferro. Its footprint in railways and infrastructure includes Indian Railways, KEC International, DMRC, RVNL, and Godrej EPC. Internationally, TARILs 40-plus country presence includes relationships with ABB, JSW-USA, ArcelorMittal, Fluor, Siemens Energy, Powerlink, Danieli, EDESUR, UTE, CEA Group, FREIM-Italy, and the Novorossiysk Group in Russia.
This breadth and repeat-order relationship across utilities, industrial conglomerates, and global EPC players is, in itself, a competitive strength — it reflects sustained customer confidence built order after order, rather than one-off wins.
Beyond its client roster, TARILs competitive strengths are genuine and well documented. The Company built and dispatched a 333 MVA, 1200 kV auto transformer to the National Test Station at Bina through PowerGrid — described as the highest AC voltage transformer in the world. It has tested a 220/253 MVA electric arc furnace transformer, among the largest ratings globally. TARIL is the only Indian transformer company with a NABL- accredited laboratory for electrical steel testing. It holds technology licences from Fuji Electric and maintains a strategic alliance with ZTR of Ukraine. It is also the first Indian company to receive an HVDC converter transformer repair order from PowerGrid. Together, these engineering and testing credentials are not easily replicated and create meaningful barriers to entry in the highest-value, highest- voltage segments of the industry — reinforcing the trust that underpins TARILs expanding order book.
OPPORTUNITIES AND THREATS
4.1 OPPORTUNITIES
A national transmission super-cycle with multiyear visibility. The National Electricity Plan commits over Rs.9.15 lakh crore to transmission investment by 2032, with grid transformation capacity rising from about 1,429 GVA to 2,345 GVA. As a full-range transformer and reactor manufacturer, the Company is positioned directly in the path of this spend.
A defined HVDC entry pathway. The plan envisages nine HVDC links totalling 33.25 GW. The Companys PGCIL HVDC converter-transformer repair order, the first such order to an Indian company, creates a pathway to PGCIL approval of its HVDC manufacturing technology, opening a high-margin segment that very few domestic players can serve.
A structurally attractive export channel. Grid- replacement demand in the United States and Europe, combined with easing US tariff friction noted by the IMF, supports the Companys global footprint of 40-plus countries and the highest realisations in its mix. Exports were approximately 4 percent of revenue as at end-December 2025, leaving substantial headroom for growth.
Near-doubled capacity feeding operating leverage.
Installed capacity has risen from 40,000 MVA to approximately 75,000 MVA, against record FY26 production of 33,763 MVA. As utilisation of the new capacity rises, fixed-cost absorption should support margins from FY28, when the Changodar and Moraiya expansions are expected to yield results.
Backward integration as a structural margin lever. The Company is internalising CTC, bushings, pressboard and fabrication, targeting full backward integration by the first quarter of FY 2027-28. The consolidated EBITDA margin already runs approximately 230 basis points above standalone, evidencing the margin captured by the subsidiaries.
Renewable and green-hydrogen-aligned products.
Solar-application and green-hydrogen-application transformers, together with reactors for renewable evacuation, align the product range with the Green Energy Corridor and renewable-integration demand embedded in national policy.
A large, visible order pipeline. An unexecuted order book of Rs.5,005 crore as on 31 March 2026 and inquiries under negotiation exceeding Rs.23,000 crore provide revenue visibility well beyond the current year and allow selective, margin-accretive order acceptance.
4.2 THREATS
Raw-material price volatility. Copper, electrical steel and transformer oil are the dominant inputs, and copper-led cost inflation was a primary cause of the in-year margin contraction. Standalone cost of materials consumed rose to Rs.1,763.00 crore from Tl,421.90 crore, and the IMFs war-driven energy- price scenario points to continued commodity volatility.
A stretched working-capital cycle. The consolidated cash conversion cycle more than doubled to 199 days from 94 days and operating cash flow turned negative, with receivables up roughly Rs.410 crore. Until the cycle normalises, growth must be funded through short-term borrowing.
Execution and capacity-ramp delays. Management has disclosed that the Changodar capacity addition was delayed by four to five months and that full backward integration has slipped slightly owing to slow site progress and late arrival of plant and machinery. Execution risk is the key constraint the industry itself cites for the FY26 ordering slowdown.
An industry-wide ordering pause. The IBEF/Motilal Oswal assessment notes fewer utility schemes were awarded in FY26 than in the prior year. Although attributed to execution rather than demand, a prolonged pause would pressure fresh order intake.
Intensifying competition. Well-capitalised competitors are expanding aggressively; Hitachi Energy India alone reported an order backlog above Rs.29,500 crore as at March 2026, and players such as Voltamp, Atlanta Electricals and Shilchar are scaling. Competition is sharpest in standard distribution and lower-voltage products.
Single-segment and geographic concentration.
The Company operates in one product segment with its principal manufacturing concentrated in Gujarat, leaving it exposed to a single industry cycle and to location-specific operational risk
4.3 ON BALANCE
On balance, the opportunity set materially outweighs the threats, but the threats are real and near-term while the opportunities are large and multi-year. The Company sits in front of a government-backed, multi-year transmission build-out, has near-doubled its capacity, and holds a differentiated position in high-voltage, furnace and HVDC products where supply is tight and margins are richest. The honest counterweight is that FY27 will be a transition year in which working-capital discipline and execution not demand determine the quality of earnings. Managements decision to pace order intake selectively and to prioritise collections and stricter payment terms is the right response to this balance, and it is the reason the Company should emerge from the build phase with both the capacity and the working-capital health to convert its order book into durable, higher-margin growth from FY28.
RISKS AND CONCERNS
5.1 BUSINESS AND OPERATIONAL RISKS
Raw-material price and availability risk. Copper and electrical steel (CRGO) dominate the cost base, and copper-led inflation directly compressed FY26 margins. This is the Companys most material operational exposure because it cannot always be passed through on fixed-price contracts. Mitigation: the Company has prioritised order selection with better margins and payment terms and is pursuing backward integration to internalise value; price- variation clauses and hedging are the natural further mitigants.
Execution and capacity-ramp risk. The Changodar expansion was delayed four to five months and full backward integration has slipped slightly. Delays defer the operating leverage on which the FY28 margin recovery depends. Mitigation: management reports a staged commissioning plan with results expected from FY28 and backward-integration facilities fully operational from Q1 FY28.
Single-segment and single-site concentration.
Operating in one product segment with manufacturing concentrated in Gujarat exposes the Company to a single industry cycle and to location-specific disruption. Mitigation: the breadth of product applications across many end-markets provides some internal diversification, and the multi-plant footprint within the cluster spreads operational risk.
Skilled-labour availability. High-voltage transformer manufacturing depends on specialised design, winding and testing skills that are scarce. The steep rise in employee benefit expense in FY26 reflects the cost of staffing the ramp. Mitigation is addressed in Section 8.
5.2 FINANCIAL RISKS
Working-capital and liquidity risk. A cash conversion cycle of 199 days and negative operating cash flow mean growth is currently funded by shortterm borrowing; standalone short-term borrowings rose to Rs.370.92 crore. Mitigation: management has intensified collections, tightened order acceptance terms, and retains a conservative net-worth-to- borrowing position, with tangible net worth above Tl,400 crore.
Capital-expenditure funding risk. A further Rs.1000 crore of capex is planned over fifteen months. Funding this alongside a stretched working-capital cycle requires careful sequencing. Mitigation: a strengthened post-QIP equity base and modest gearing provide headroom.
Receivables credit risk. A large share of receivables sits with utilities and EPC customers whose payment cycles can be long. Mitigation: the customer base is predominantly government-backed and blue-chip, which lowers default risk even where it lengthens collection periods.
5.3 REGULATORY AND COMPLIANCE RISKS
Listing and disclosure compliance. As a listed entity the Company must comply continuously with the SEBI (LODR) Regulations, 2015 and the Companies Act, 2013. Mitigation: results for FY26 were reviewed by the Audit Committee and approved by the Board on 21 April 2026 and carry an unmodified statutory audit opinion.
Product approval and tariff/utility-procurement risk. Sales to PGCIL and state utilities depend on type-approvals, testing accreditation and utility procurement and tariff frameworks. Mitigation: The Company holds a NABL-accredited steel-testing laboratory and has secured PGCIL approvals for reactors at its Changodar testing facility, with HVDC approval pathways in progress.
Equity-plan and related-party governance. The
TRIL Employee Stock Option Plan 2024 and the Companys related-party dealings require ongoing disclosure and governance discipline. Mitigation: ESOP grants and the associated Rs.10.31 crore expense are disclosed in the audited notes.
5.4 MACROECONOMIC AND GEOPOLITICAL RISKS
Commodity and energy-price shocks. The IMFs war-driven scenarios point to continued energy and commodity volatility, which feeds directly into the Companys input costs. Mitigation: backward integration and disciplined order pricing reduce, but do not eliminate, this exposure.
Import-dependence for CRGO steel. India relies substantially on imported grain-oriented electrical steel, exposing manufacturers to currency and supply risk. Mitigation: the Companys NABL steeltesting capability and supplier relationships support quality assurance, though supply concentration remains.
Currency risk on exports and imports. A growing export book and imported inputs create twoway currency exposure. Management is expected to maintain forward-cover or natural-hedge approaches to manage this risk.
FINANCIAL PERFORMANCE REVIEW
FY 2025-26 was the year in which the scale of TARILs transformation became visible in the financial statements. On a consolidated basis, revenue from operations rose to Rs.2,508.80 crore from Rs.2,019.39 crore in FY 2024-25, a growth of 24.2 percent, while consolidated profit after tax increased to Rs.272.17 crore from Rs.216.43 crore, up 25.6 percent. On a standalone basis, revenue from operations grew 22.8 percent to Rs.2,395.49 crore and profit after tax grew 20.1 percent to Rs.225.43 crore. These outcomes were achieved alongside the highest-ever production of 33,763 MVA against 29,118 MVA in the prior year.
6(A) YEAR-ON-YEAR HIGHLIGHTS
Standalone crore, except per share data)
| Particulars | FY 2025-26 | FY 2024-25 | Growth |
| Revenue from Operations | 2,395.49 | 1,950.14 | 22.8% |
| Other Income | 56.85 | 32.78 | 73.4% |
| Total Income | 2,452.34 | 1,982.92 | 23.7% |
| EBITDA | 369.96 | 316.85 | 16.8% |
| EBITDA Margin (on revenue) | 15.4% | 16.2% | -80 bps |
| Finance Cost | 44.92 | 48.38 | -7.2% |
| Depreciation | 23.20 | 24.28 | -4.4% |
| Profit Before Tax | 301.84 | 247.45 | 22.0% |
| Profit After Tax | 225.43 | 187.57 | 20.1% |
| PAT Margin (on revenue) | 9.4% | 9.6% | -20 bps |
| Basic / Diluted EPS ( Rs.) | 7.51 | 6.31 | 19.0% |
Consolidated crore, except per share data)
| Particulars | FY 2025-26 | FY 2024-25 | Growth |
| Revenue from Operations | 2,508.80 | 2,019.39 | 24.2% |
| Total Income | 2,569.65 | 2,051.09 | 25.3% |
| EBITDA | 444.03 | 359.14 | 23.6% |
| EBITDA Margin (on revenue) | 17.7% | 17.8% | -10 bps |
| Profit Before Tax | 363.04 | 284.84 | 27.5% |
| Profit After Tax | 272.17 | 216.43 | 25.6% |
| PAT attributable to owners | 264.39 | 214.27 | 23.4% |
| Basic / Diluted EPS ( Rs.) | 9.07 | 7.21 | 25.8% |
6(B) STANDALONE VERSUS CONSOLIDATED
The gap between the consolidated and standalone results is the clearest financial expression of the Companys backward-integration and capabilitybuilding strategy. Consolidated revenue exceeded standalone revenue by Rs.113.31 crore and consolidated PAT exceeded standalone PAT by Rs.46.74 crore, with subsidiaries contributing higher blended margins: consolidated EBITDA margin of 17.7 percent stands roughly 230 basis points above the standalone 15.4 percent. The subsidiaries contributed Group revenue of Rs.313.32 crore and net profit after tax of Rs.292.59 crore (reflecting investment and consolidation effects within the Group). The widening consolidated premium is consistent with managements stated plan to internalise components such as CTC, bushings, pressboard and fabrication, capturing margin that was previously paid away to third-party suppliers.
6(C) REVENUE BY PRODUCT LINE AND END MARKET
Because the Company reports a single Ind AS 108 segment, no statutory segment revenue split is available. The product portfolio spans power transformers, furnace transformers, rectifier transformers, distribution transformers, specialty transformers and reactors, serving power generation, transmission, distribution and industrial end-markets. The most recent management view of the order-book and revenue mix showed the unexecuted order book weighted towards utilities (44 percent), EPC (30 percent) and industrial or private customers (26 percent), while in-year revenue skewed more heavily towards utilities (56 percent), with the balance from EPC (9 percent) and industrial or private customers (35 percent). Exports represented approximately 4 percent of revenue and approximately 9 percent of the order book.
6(D) PROFITABILITY ANALYSIS
The headline profit growth conceals a margin story that management has been candid about. Standalone EBITDA margin eased by approximately 80 basis points year-on-year to 15.4 percent, and the pressure was sharpest in the fourth quarter, where standalone EBITDA margin fell to 15.1 percent from
17.1 percent in Q4 FY25, and consolidated Q4 EBITDA margin fell to 17.5 percent from 20.2 percent. Three factors explain the movement.
First, raw material cost inflation most notably in copper compressed gross margins; cost of materials consumed on a standalone basis rose to Rs.1,763.00 crore from Rs.1,421.90 crore. Second, the revenue mix leaned towards faster-executing utility orders rather than the highest-margin niche products. Third, employee costs rose steeply as the organisation staffed up for the capacity ramp, with standalone employee benefit expense increasing to Rs.85.09 crore from Rs.52.29 crore. Working against these pressures, finance costs fell to Rs.44.92 crore from Rs.48.38 crore as the post-QIP balance sheet carried lower average gearing for part of the year, and depreciation was broadly stable, allowing PAT to grow 20.1 percent despite the EBITDA-margin give-back.
6(E) BALANCE SHEET ANALYSIS
The standalone balance sheet expanded to Rs.2,500.29 crore from Rs.2,047.06 crore, and the consolidated balance sheet to Rs.2,665.72 crore from Rs.2,184.96 crore, reflecting both the growth in operating scale and a heavy investment phase. Capital work-inprogress more than doubled on a standalone basis to Rs.137.80 crore from Rs.61.63 crore, evidencing the Changodar and Moraiya expansions. Current trade receivables rose to Rs.853.32 crore from Rs.443.15 crore and inventories rose to Rs.560.88 crore from Rs.399.43 crore.
Tangible net worth strengthened to Rs.1,410.19 crore from Rs.1,180.40 crore on the back of retained profits and the prior QIP, keeping the capital structure conservative. Standalone short-term borrowings including current maturities increased to Rs.370.92 crore from Rs.182.21 crore, while long-term borrowings reduced to Rs.53.08 crore from Rs.77.83 crore. On a consolidated basis, total borrowings stood at approximately Rs.456.61 crore against tangible net worth comfortably above Rs.1,400 crore, leaving gearing modest for a company in a capital-intensive growth phase.
6(F) WORKING CAPITAL ANALYSIS
Working capital is the single most important watch item in this years accounts. On the consolidated Screener.in data, the cash conversion cycle more than doubled to 199 days from 94 days, and working capital days rose to 102 from 34. Debtor days lengthened to 129 from 85 as receivables built up against a back-ended execution schedule, and days payable fell sharply to 62 from 109 as the Company settled suppliers faster during the backward- integration transition. Inventory days rose more modestly to 133 from 118.
| Working Capital Ratio (Consolidated) | FY 2025-26 | FY 2024-25 | Change |
| Debtor Days | 129 | 85 | +44 days |
| Inventory Days | 133 | 118 | +15 days |
| Days Payable | 62 | 109 | -47 days |
| Cash Conversion Cycle | 199 | 94 | +105 days |
| Working Capital Days | 102 | 34 | +68 days |
This is a growth-driven, not a quality-driven, deterioration, but it is the principal reason the Company must fund the coming year carefully. Management has responded with intensified collection efforts and stricter order acceptance terms. borrowings of Rs.187.91 crore. The net result was a small positive change in cash of Rs.2.83 crore for the Group.
6(G) CASH FLOW ANALYSIS
The working-capital build is most visible in the cash flow statement. On a consolidated basis, net cash from operating activities was negative Rs.105.38 crore, against a positive Rs.156.58 crore in the prior year; on a standalone basis, net cash from operating activities was negative Rs.58.57 crore. In both cases the swing is explained almost entirely by the absorption of cash into receivables and inventory, since consolidated operating profit before working-capital changes was a healthy Rs.409.63 crore. Consolidated investing cash outflow was modest at approximately Rs.7.40 crore, and financing activities provided Rs.115.61 crore, chiefly from an increase in working-capital
6(H) SEBI-MANDATED KEY RATIOS
| Ratio | FY 2025-26 | FY 2024-25 | YoY Change |
| Revenue growth (consolidated) | 24.2% | 44.4% | Lower base effect |
| EBITDA Margin | 17.7% | 17.8% | -10 bps |
| PAT Margin | 10.8% | 10.7% | +10 bps |
| Return on Capital Employed (ROCE) | 23% | 28% | -500 bps |
| Cash Conversion Cycle (days) | 199 | 94 | +112% |
| Working Capital Days | 102 | 34 | +200% |
| Debtor Days | 129 | 85 | +52% |
| Days Payable | 62 | 109 | -43% |
Explanations for movements exceeding 25 percent. Cash conversion cycle and working capital days rose because receivables and inventory grew faster than revenue against a back-ended execution and order-staging strategy, while payables were settled more quickly. Debtor days rose for the same receivables-build reason. Days payable fell as the
Company paid suppliers faster during its backward- integration transition. ROCE declined because the capital base expanded materially through CWIP, inventory and receivables ahead of the earnings those investments will generate from FY28, so the denominator grew faster than profit in the build year.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
A company transforming at the pace and scale of TARIL near-doubling its manufacturing capacity, integrating six subsidiaries, onboarding a substantially larger workforce, and growing revenues by over 24 percent places unusual demands on its internal control environment. The adequacy of internal controls in FY26 must therefore be assessed not merely against statutory requirements but against the organisational complexity the Company has deliberately created. By both measures, the framework remains sound, though certain areas are evolving in step with the Companys growth.
7.1 FRAMEWORK OVERVIEW AND LEGAL BASIS
The Company maintains an internal control framework commensurate with the size, scale and nature of a capital-goods manufacturer operating across multiple plants and a growing group structure. This MD&A on internal controls is furnished pursuant to Regulation 34(2)(e) read with Part B, Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The controls themselves are designed to meet the requirements of Section 134 and Section 143(3) (i) of the Companies Act, 2013, the latter requiring the statutory auditor to opine on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting.
The Companys internal control framework is designed around four objectives: reliability of financial reporting; safeguarding of assets; prevention and detection of fraud and error; and compliance with applicable laws, regulations and internal policies. Controls are structured at the entity level (tone from the top, code of conduct, delegation of authority), process level (accounting, procurement, project execution, quality assurance), and information-technology level (ERP controls, access management, data integrity).
7.2 AUDIT COMMITTEE OVERSIGHT
The Audit Committee of the Board is the primary governance body for internal control oversight, with a remit extending to the financial reporting process, internal controls, statutory audit, internal audit, and related-party transactions. The Committee met regularly during FY26, reviewed internal audit reports, and engaged with the statutory auditor. For FY26, the standalone and consolidated financial results were reviewed and recommended by the Audit Committee and approved by the Board of Directors at their meetings held on 21 April 2026. The statutory auditor, Manubhai & Shah LLP, issued an unmodified opinion on both sets of results, confirming a true and fair view in conformity with the recognition and measurement principles of the applicable Indian Accounting Standards.
The Boards responsibility statement in the audited results affirms the maintenance of accounting records, safeguarding of assets, prevention and detection of fraud, and the accuracy and completeness of accounting records in accordance with applicable accounting standards. The Audit
Committees composition, which includes the requisite complement of independent directors with financial expertise, meets the requirements of the Companies Act, 2013 and the SEBI LODR Regulations.
7.3 FINANCIAL REPORTING CONTROLS
The Companys financial statements are prepared under Ind AS as prescribed under Section 133 of the Companies Act, 2013. Key financial reporting controls include: the monthly closing and review cycle managed by the finance team under the CFO; variance analysis against budgets and prior periods at the consolidated and entity levels; Audit Committee review of quarterly and annual results prior to Board approval; and independent statutory audit of both standalone and consolidated statements with an unmodified opinion for FY26.
For the consolidated Group, the statutory auditors report discloses reliance on other auditors reports for five subsidiaries and on management-certified information for one a disclosure that is standard practice for a holding company group and does not indicate a control weakness. As the subsidiaries grow in revenue and asset base, management should consider whether the management-certified subsidiary warrants a standalone statutory audit.
7.4 INTERNAL AUDIT
The Company operates an internal audit function covering operational, financial and compliance controls across its manufacturing units and group entities. The internal audit plan is approved by the Audit Committee and findings are reported periodically to the Committee. The scope of internal audit encompasses the manufacturing value chain procurement, production, quality, dispatch and billing as well as financial controls, treasury, HR and payroll, and statutory compliance.
In a year of rapid capacity expansion, the internal audit functions coverage of capital expenditure including procurement processes, contract management, progress billing and asset capitalisation for the Changodar and Moraiya expansions is of heightened importance, as capex controls are typically the area of greatest risk in a build phase. Management should confirm the scope and findings of capex-related internal audit reviews for FY26.
7.5 OPERATIONAL AND GROUP CONTROLS
Given the single reportable segment, controls are organised around the manufacturing value chain: design and engineering; procurement (increasingly internalised through backward integration); production planning; quality assurance and testing; dispatch; and project execution. Quality and testing controls are reinforced by the Companys NABL- accredited electrical-steel testing laboratory the only such facility in the Indian transformer industry and by the type-testing and PGCIL-approval processes its products undergo. The NABL accreditation ensures independence and traceability of test results, which is both a quality control and a commercial credential.
For the consolidated Group, controls extend to the six subsidiaries through the holding-company governance framework. The expansion of the Group through backward integration has increased the complexity of intercompany transactions in procurement, services and financing and the robustness of the transfer-pricing and intercompany- elimination controls will grow in importance as the subsidiaries contribution to consolidated revenue increases.
7.6 COMPLIANCE CONTROLS
The Companys compliance framework covers statutory, environmental, safety and listing obligations. Its ISO 9001:2015 certification evidences a systematised quality-management system; ISO 14001:2015 confirms an environmental management system meeting international standards; and ISO 45001:2018 attests to an occupational health and safety management system. These certifications are not merely labels; they require annual third- party audits and corrective-action tracking, and therefore represent an independent assessment of the Companys operational compliance discipline.
Listing compliance, including periodic financial reporting, corporate-governance disclosures, insider-trading policies and material-event reporting under SEBI LODR, is managed by the Company Secretary, with periodic reporting to the Board. For FY26, the Company met all filing deadlines for quarterly and annual results, and the Boards Corporate Governance Report, included in the Annual Report, provides the required disclosures under Schedule V of the SEBI LODR Regulations.
7.7 CONTROLS IN A GROWTH PHASE: LOOKING AHEAD
The principal control challenge for FY27 is not a weakness in existing controls but the need to scale them in step with the Companys operational growth. Specific areas to monitor include: the onboarding and control integration of the enlarged workforce employee count grew substantially in FY26; the extension of ERP and process controls to the newly commissioned backward-integration facilities; the strengthening of receivables management and credit controls as the debtor book has grown to Rs.853 crore; and the formalisation of capex-management controls as the remaining Rs.1000 crore of planned investment is deployed. Managements track record of meeting SEBI compliance timelines, maintaining an unmodified statutory audit opinion, and growing the Group profitably gives confidence that the control environment will evolve appropriately.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
TARILs transformation from a mid-sized transformer maker into one of Indias leading high-voltage and specialty transformer manufacturers has required an equally transformative investment in human capital. The workforce that designs, winds, insulates, tests and dispatches a 333 MVA, 1200 kV auto transformer the highest AC-voltage product in the world is not assembled quickly or inexpensively, and the people-agenda of FY26 was, in essence, the people agenda of the expansion: recruit at scale, retain the specialists, and build the institutional knowledge the new capacity will require.
8.1 WORKFORCE GROWTH AND THE COST OF SCALING
FY26 was a year of deliberate workforce expansion to support the capacity ramp, and the cost of that expansion is visible in the accounts. Standalone employee benefit expenses rose to Rs.85.09 crore from Rs.52.29 crore, an increase of approximately 63 percent more than double the rate of revenue growth. Consolidated employee benefit expense rose to Rs.105.74 crore from Rs.60.07 crore. This pace of hiring outstripped revenue growth and contributed to the in-year margin pressure discussed in Section
6, but it is a necessary and deliberate investment: a manufacturer cannot lift installed capacity from 40,000 MVA to 75,000 MVA and commission backward-integration facilities without first building the design, engineering, winding, testing and project-management teams those facilities require.
The increase in employee cost also reflects a structural shift in the workforce composition. As the Company moves up the voltage and complexity curve into HVDC, 1200 kV EHV and specialty products, a larger proportion of the workforce must be drawn from a relatively small national pool of engineers and technicians with the relevant specialised skills. Recruiting from this pool commands premium compensation relative to the standard industrial labour market, and retaining those specialists in a tight market requires competitive salaries, career pathways and retention instruments such as the ESOP programme described below.
8.2 SPECIALISED SKILLS: THE DEFINING HR CHALLENGE
The defining people challenge in this industry is not volume of labour but depth of specialised skill. High- voltage and niche transformer manufacturing up to the 1200 kV class, furnace duty, and now HVDC depends on scarce competencies: insulation design engineering, high-voltage winding and tanking, impulse and short-circuit testing to IEC and IS standards, thermal modelling, and the interpretation of partial-discharge and dielectric diagnostic results. These are skills that cannot be acquired through standard technical education and are developed, in practice, through years of supervised experience on advanced transformer projects.
TARIL has three structural advantages in building and retaining this specialist capability. First, its technology-licence relationships with Fuji Electric of Japan and its strategic alliance with ZTR Ukraine embed a continuous stream of advanced technical knowledge into the Companys engineering teams, exposing them to global best practice that is itself a retention benefit. Second, its NABL-accredited laboratory for electrical steel testing is the only such facility in the Indian transformer industry, creating a unique internal training and quality-assurance environment. Third, the sheer breadth and ambition of the Companys product pipeline including the HVDC repair work and the aspiration to HVDC manufacturing approval makes it one of the most technically stimulating environments available to a power-equipment engineer in India.
The knowledge-transfer challenge will intensify in FY27 as the new Changodar and Moraiya capacity comes online and the backward-integration facilities staff up. Managements priority must include structured knowledge-transfer programmes between experienced engineers and new hires, and the documentation of tacit manufacturing knowledge in ways that are not dependent on any single individual.
8.3 EMPLOYEE OWNERSHIP AND THE ESOP PROGRAMME
The Company has aligned employee and shareholder interests through the TARIL Employee Stock Option Plan 2024, approved by shareholders on 13 May 2024, authorising up to 42,76,922 options. During FY26 the Company granted 26,32,968 options on 1 August 2025, the majority at an exercise price of T372 per share and a tranche at T1, and recognised T10.31 crore as employee stock option expense for the year.
The ESOP programme serves a dual purpose. It is, first, a retention tool for the specialised engineering and leadership talent the Company must hold through the current build phase options typically vest over three to five years, creating a financial incentive to remain through the period in which the new capacity begins to generate returns. It is, second, an alignment instrument: as the companys share price reflects the success of its transformation strategy, ESOP holders have a direct financial stake in the operational discipline and execution quality that determine that success. For a company where the gap between outstanding and mediocre execution can be measured in hundreds of crores of value, this alignment is commercially meaningful.
8.4 TRAINING, DEVELOPMENT AND TECHNOLOGY TRANSFER
In a business built on engineering capability, training and development is not a support function it is a strategic investment. The Companys technology- licence and alliance relationships bring formal knowledge-transfer obligations, including training of Indian engineers at Fuji Electrics facilities in Japan and access to ZTRs design and manufacturing documentation for 765 kV class products. These international exposure programmes are among the most effective tools the Company has for building depth of expertise quickly in a market where advanced transformer experience is rare.
Internally, the Companys NABL laboratory provides a platform for structured training in electrical- steel testing, insulation diagnostics and quality assurance, with the accreditation requirements themselves imposing a discipline of documented procedures and competency verification. As the HVDC repair work progresses, the engineering teams hands-on exposure to converter-transformer design and testing will itself become a unique institutional asset, providing a foundation for the HVDC manufacturing approval the Company is pursuing from PGCIL.
8.5 SAFETY, RECOGNITION AND INDUSTRIAL RELATIONS
The Companys occupational health and safety framework is certified under ISO 45001:2018, the international standard for safety management systems. This certification requires a systematic approach to identifying, assessing and controlling workplace hazards, and includes annual third-party audits against the standard. For a manufacturer working with high-voltage equipment, heavy transformers, and transformer oil a combustible liquid robust safety management is both a moral obligation and a commercial necessity: a serious safety incident at a key facility could disrupt production and, in the worst case, affect the NABL and type-testing accreditations the business depends on.
On external recognition, the Company received an operational excellence award from Power Grid Corporation of India during FY26, a customer- conferred acknowledgement of execution quality in its most important customer relationship. Awards of this kind are commercially valuable in a business where the bidding process for large PGCIL contracts includes a qualitative assessment of past execution performance. They are also a signal to the workforce that the organisations standards of delivery are recognised at the highest levels of Indias power infrastructure establishment.
8.6 PEOPLE PRIORITIES GOING FORWARD
The peoples agenda for FY27 and beyond follows the operational one. As the new Changodar and Moraiya capacity and the backward-integration facilities reach commercial operation, the priority is to stabilise the enlarged workforce and convert the FY26 investment in headcount into operating productivity. Specifically: the rate of headcount growth must moderate relative to revenue, so that the FY26 cost build converts into operating leverage from FY28; the HVDC engineering team must be developed to support the manufacturing approval pathway; the knowledge-transfer and documentation programmes must be formalised before key specialists retire or depart; and the ESOP programme must be refreshed appropriately as the existing grant begins to vest.
ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG)
TARILs Annual Report theme, "Transformation That Powers the Nation," is not merely a statement about the Companys financial scale. It speaks to a broader aspiration: to be a manufacturer whose growth creates value not only for shareholders but for the employees, communities, customers and environment in which it operates. ESG is not a separate agenda bolted onto the business in a company that makes the equipment through which Indias energy transition flows, environmental, social and governance considerations are embedded in the commercial strategy itself.
9.1 ENVIRONMENTAL RESPONSIBILITY
Products that enable decarbonisation. TARILs most significant positive environmental contribution is the products it manufactures. High-efficiency power transformers reduce energy losses in the transmission and distribution network; solar-application transformers enable renewable energy evacuation; reactors stabilize grids with high renewable penetration; and green- hydrogen-application transformers support electrolysis infrastructure. As India pursues its nationally determined contributions under the Paris Agreement 500 GW of non-fossil capacity by 2030, net-zero emissions by 2070 the electrical equipment enabling that transition is itself an environmental asset. The Companys product roadmap, including HVDC converter transformers, is aligned with the most ambitious end of Indias decarbonisation pathway.
Environmental management system. The Company maintains ISO 14001:2015 certification across its manufacturing operations, which requires a documented environmental management system including: identification and assessment of environmental aspects and impacts; legal compliance tracking for air, water, waste and energy regulations; and periodic management review and continuous improvement targets. Third-party audit for recertification ensures independence in the assessment of the Companys environmental performance.
Energy efficiency and resource management. As a manufacturer of energy-efficiency equipment, TARIL is conscious of the irony of excessive energy consumption in its own operations. Transformer manufacturing is an energy-intensive process winding, impregnation, drying and testing all consume significant power. The Companys energy-management practices, guided by its ISO 14001 system, target progressive improvement in energy consumption per MVA of output. Water management in the transformer oil processing and cooling cycle, and responsible management of transformer oil waste and insulating materials, are additional environmental priorities in the operational context.
Responsible supply chain. Grain-oriented electrical steel (CRGO), the Companys principal raw material, is produced by a small number of global manufacturers with varying environmental footprints. As the Company grows its procurement scale and backward-integration capability including through its Triveni Transtech subsidiary, formerly a Posco joint venture it is increasingly able to exercise procurement discipline on the sustainability credentials of its supply chain. The NABL-accredited steel-testing laboratory, which can independently verify the magnetic and physical properties of incoming CRGO, also provides the technical basis for supplier qualification on quality and performance grounds.
9.2 SOCIAL RESPONSIBILITY
Community engagement and CSR. As a listed company with profits above the threshold prescribed under Section 135 of the Companies Act, 2013, TARIL is required to spend 2 percent of its average net profits of the preceding three financial years on Corporate Social Responsibility activities. The Companys CSR programme, overseen by the Boards CSR Committee, focuses on areas where it can make a meaningful contribution given its Gujarat base: education and skill development, particularly in technical and vocational training relevant to the electrical and manufacturing sectors; healthcare; and community infrastructure in the areas proximate to its Changodar and Moraiya plants.
Workforce diversity and inclusion. With a workforce that has grown rapidly to support the capacity ramp, FY26 was a year in which diversity and inclusion practices were tested by the practicalities of large-scale recruitment. The specialised nature of high-voltage transformer manufacturing has historically resulted in a predominantly male technical workforce, reflecting the engineering demographics of Indias technical education system. The Companys aspiration is to broaden its talent pool progressively as the supply of qualified female engineers in power and electrical disciplines grows, supported by industry-wide and national initiatives in womens technical education.
Supply chain and labour standards. TARILs procurement and vendor-management processes include quality and compliance requirements for its supplier base. As the Company scales and as ESG reporting requirements for listed companies expand under SEBIs Business Responsibility and Sustainability Reporting (BRSR) framework, management is extending its supply-chain due- diligence processes to encompass labour standards, environmental compliance and human rights assessments among key suppliers.
9.3 GOVERNANCE
Board composition and independence. The Board of Directors includes the requisite complement of independent directors with financial and domain expertise as required under the Companies Act, 2013 and SEBI LODR Regulations, 2015. The Audit Committee, Nomination and Remuneration Committee, Stakeholder Relationship Committee, and CSR Committee are constituted and functioning as per statutory requirements, with independent directors chairing the key committees. The Corporate Governance Report in the Annual Report provides the full disclosure of committee composition, meeting attendance and governance compliance.
Transparency and disclosure. The Companys financial results for FY26, approved by the Board on 21 April 2026, carry an unmodified statutory audit opinion from Manubhai & Shah LLP and were filed with the stock exchanges within the prescribed timelines. The Annual Report, of which this MD&A
forms part, is prepared in compliance with Regulation 34(2) of SEBI LODR and the applicable provisions of Schedule V. Shareholder communications include quarterly investor presentations and earnings calls, which demonstrate a commendable level of candour the management team has been explicit about margin pressure, working-capital stretch and execution delays, providing investors with a balanced and complete picture rather than only the headline growth story.
SEBI BRSR compliance. The Company prepares and discloses its Business Responsibility and Sustainability Report in accordance with SEBIs BRSR framework, which requires structured reporting across nine principles of the National Guidelines on Responsible Business Conduct. This reporting captures the Companys environmental, social and governance performance across a standardised set of metrics, providing comparability across listed companies and a foundation for improving ESG performance year over year.
Shareholder value. At its most fundamental, governance is the mechanism by which management is held accountable to shareholders for the capital entrusted to it. On this measure, FY26 was a successful year: consolidated PAT attributable to owners rose 23.4 percent to Rs.264.39 crore, diluted EPS rose 25.8 percent to Rs.9.07, and the ESOP programme aligns managements long-term interests with those of the equity base. The Board has declared dividends consistent with its capital- allocation policy, balancing return of capital with reinvestment in the growth programme.
HUMAN CAPITAL MANAGEMENT
People are the medium through which TARILs technology licences become delivered products, through which its order book becomes revenue, and through which its transformation strategy becomes an operational reality. The Companys FY26 workforce expansion a 63 percent rise in standalone employee benefit expense to Rs.85.09 crore was the most visible signal of how seriously management takes this principle. This section examines the strategic dimensions of human capital management that sit above the operational HR account provided in Section 8.
10.1 HUMAN CAPITAL AS A COMPETITIVE ASSET
In most capital-goods businesses, the physical assets, the machines, the buildings, the land are the primary source of competitive advantage. In transformer manufacturing above the 400 kV class, the equation is different: the knowledge embedded in the engineering team is at least as important a competitive asset as the plant and equipment. A 765 kV transformer is not built by running a process; it is built by applying decades of accumulated insight about insulation systems, electromagnetic field management, thermal behaviour, and dielectric performance under impulse conditions. This knowledge resides in people, not machines, and it is correspondingly difficult to replicate.
TARILs human capital position is strongest precisely where its business position is most differentiated. The engineers who worked on the 1200 kV auto transformer, on the 220/253 MVA electric arc furnace transformer, and who are now engaged on the HVDC converter transformer repair represent a capability cluster that does not exist elsewhere in the Indian industry in the same configuration. Protecting, deepening and extending this cluster is the human capital imperative of the next three to five years.
10.2 TALENT ACQUISITION IN A SPECIALIST MARKET
India produces approximately 1.5 million engineering graduates annually, but the number with relevant specialisation in high-voltage power engineering is a small fraction of this. The Indian electrical engineering talent pool, which feeds the transformer industry, is concentrated in the technical universities of the southern states, the IITs, and the NITs, and a substantial proportion of graduates with the most relevant profiles target the software, telecommunications or energy-management sectors rather than heavy electrical manufacturing.
TARILs acquisition strategy for specialist talent therefore involves multiple channels: structured campus recruitment from targeted engineering institutions, with specific outreach for electrical and power engineering disciplines; lateral hiring of experienced professionals from other transformer manufacturers, utilities and CPSU-sector organisations; and selective expatriate engagement through its Fuji Electric and ZTR alliances, where Japanese and Ukrainian engineers have worked alongside Indian teams on specific technology- transfer projects. As the Companys profile has risen through its headline achievements the 1200 kV transformer, the PGCIL HVDC order, the GETCO mega-order its employer brand has strengthened, making it an increasingly attractive destination for experienced power engineers.
10.3 LEADERSHIP DEVELOPMENT AND SUCCESSION
The Companys leadership team, which has stewarded the business through a period of transformative growth, is its most critical human capital asset. The Chairman and Managing Directors ambition of a US$1 billion revenue organisation by the end of the decade requires a leadership bench that can manage a business approximately twice the current size with correspondingly greater complexity. Building this bench in operations, engineering, finance, project management, and business development is a priority for FY27 and beyond.
The ESOP programme, described in Section 8, is the Companys primary formal mechanism for aligning and retaining senior and mid-level leadership. However, financial retention instruments are necessary but not sufficient: the most effective retention of leadership talent comes from the quality of the work, the pace of the organisations growth (which creates advancement opportunities), and the sense of working on problems of genuine national importance. TARILs position at the intersection of Indias infrastructure investment supercycle and its most technically demanding power-equipment challenges provides a natural and powerful source of meaning for its people that few employers in the industrial sector can match.
10.4 ORGANISATIONAL DESIGN FOR SCALE
As the Company grows from a Rs.2,500 crore organisation towards its US$1 billion aspiration, the organisational design must evolve. The integration of six subsidiaries into a coherent operating group, the coordination of manufacturing across two main plants and multiple backward-integration facilities, the management of a project-execution pipeline spanning transformer supply to blue-chip utilities and complex industrial customers, and the simultaneous pursuit of export markets across
40 countries all of these require an organisational structure that can allocate decision-making authority appropriately, maintain coordination and quality standards across a more distributed operation, and preserve the technical culture and engineering excellence that is the Companys most important competitive differentiator.
10.5 MEASURING HUMAN CAPITAL PERFORMANCE
Human capital management, like financial management, requires measurable outcomes. TARILs human capital performance metrics should encompass: revenue and output per employee, which tracks the productivity return on the FY26 workforce investment; employee attrition, particularly among specialist engineering grades; training hours per employee and the proportion of the workforce with updated type-testing and design certifications; safety performance including losttime incident rates under the ISO 45001 framework; employee satisfaction, measured through structured surveys; and the rate of internal promotion into leadership roles, as an indicator of the organisations ability to develop its own leadership pipeline.
The trajectory management is driving from 40,000 MVA of capacity with a skilled but more limited workforce, to 75,000 MVA with a team capable of HVDC, 1200 kV EHV and global export is an organisational transformation as much as a physical one. Measuring it rigorously, and reporting on it transparently to shareholders, is a dimension of human capital governance that the Company is positioned to strengthen as it matures.
FUTURE ROADMAP AND OUTLOOK
The Annual Report theme "Transformation That Powers the Nation" looks forward as well as back. FY26 was the year in which TARILs investments in capacity, technology and talent became visible in scale. FY27 and beyond is the period in which those investments must be converted into durable earnings quality, margin expansion, and the financial discipline needed to sustain a decade- long growth trajectory. Managements roadmap is specific, disclosed and grounded in the commercial realities of Indias infrastructure super-cycle.
11.1 THE US$1 BILLION REVENUE AMBITION
The Chairmans stated ambition is to build TARIL into a US$1 billion revenue organisation over the next three financial years from FY26. Phase 1 approximately Rs.2,500 crore of revenue was delivered in FY26. Phase
2 the journey towards Rs.4,000 crore (approximately US$0.5 billion at current exchange rates) is expected to be substantially completed by FY28 as the new capacity is absorbed, backward integration reaches full operational run-rate, and the mix shifts toward higher-margin specialty and export products. Phase
3 the step to US$1 billion would require a further doubling from that base, which is plausible on a five- year horizon given the NEP demand environment, the Companys differentiated product positions, and the structural export opportunity in North America and Europe.
Management has been appropriately measured in how it presents this ambition: as a directional goal, not as earnings guidance. The route to US$1 billion runs through execution discipline in FY27, margin recovery from FY28 as backward integration and the new capacity absorb fixed costs, and the progressive conversion of the HVDC and export pipelines into revenue from FY28-29.
11.2 CAPACITY AND BACKWARD INTEGRATION: THE OPERATIONAL ROADMAP
| Milestone | Expected Timeline | Financial Impact |
| Changodar expansion (22,000 MVA) commissioned | Operational FY27 | Volume uplift from H2 FY27 |
| Moraiya expansion (15,000 MVA) commissioned | Operational FY27 | Volume uplift from H2 FY27 |
| CTC wire backward integration | Q3 FY27 | Margin improvement on conductor costs |
| Bushing backward integration | Q1 FY28 | Margin improvement, supply security |
| Pressboard backward integration | Q1 FY28 | Margin improvement on insulation |
| Structural fabrication integration | Q2 FY28 | Cost reduction, shorter lead times |
| Export revenue target: 10% of total | FY28 | Premium realisation, margin accretive |
11.3 PRODUCT AND TECHNOLOGY ROADMAP
HVDC converter transformers. The PGCIL HVDC repair order is the gateway to a manufacturing approval that would qualify TARIL as the first Indian company to produce HVDC converter transformers domestically. The 33.25 GW HVDC pipeline in the National Electricity Plan represents a transformative market opportunity at typical values of Rs.40 to Rs.60 crore per converter transformer, the nine planned HVDC links could represent a market of Rs.1,500 to Rs.2,000 crore for the converter-transformer component alone, of which an approved domestic supplier would be competitively positioned to capture a meaningful share. Managements timeline for securing manufacturing approval is FY27-28.
Ultra-high-voltage EHV transformers. Having already established the worlds highest-AC-voltage transformer delivery credential with the 333 MVA, 1200 kV unit, TARIL is positioned to bid for and supply the most technically demanding transformers in the NEPs 765 kV and 800 kV HVAC backbone programmes. These are also the products in which supply is most constrained globally, margins are highest, and barriers to competitive entry are greatest. The expanded capacity at Changodar is specifically configured for this voltage class.
Exports: North America and Europe. At approximately 4 percent of revenue in FY26, exports are substantially below their potential. Management has signalled an ambition to grow the export share to approximately 10 percent by FY28, primarily targeting the United States and European grid-replacement market. Achieving this will require type-testing to ANSI/IEEE and relevant national standards, utility qualifications, and potentially a strategic logistics and service partnership in the target markets. The Companys Fuji Electric relationship, which brings a global network, is an asset in this context.
Specialty and industrial growth. The furnace- transformer franchise, which includes globally competitive EAF transformer ratings, serves a growing industrial customer base as Indian steelmakers shift to electric arc furnace technology for green steel production. Green hydrogen application transformers, for electrolysers, and data centre transformers, for hyperscale and edgecomputing infrastructure, represent two additional specialty categories whose demand trajectory is strongly positive over the five-year horizon.
11.4 FY27 PRIORITIES: THE BRIDGE YEAR
FY27 is a transition year in which the investments of FY26 must be converted into operational outcomes, and in which the working-capital discipline that ensures the Company can fund those outcomes must be restored. Management has been explicit about the three priorities:
? Working capital normalisation: reducing the cash conversion cycle from 199 days towards a sustainable level, through intensified collections, advance payment terms on new orders, and a more selective order-acceptance process
? Margin stabilisation and recovery: protecting EBITDA margins against copper-price volatility through backward integration, disciplined order pricing, and a shift of the revenue mix towards higher-margin EHV, specialty and export products
? Execution quality: delivering the existing Rs.5,005 crore order book on time and to specification, which is both the commercial priority and the precondition for converting the Rs.23,000 crore inquiry pipeline into the next generation of orders
11.5 LONG-TERM VISION
TARILs long-term vision is to be recognised as one of Asias leading specialised transformer manufacturers not the largest by volume, but among the most technically capable and commercially disciplined, operating in the highest-value segments of a global industry that will be shaped by energy transition for the next three decades. Indias NEP provides the platform; the Companys technology depth, HVDC credentials and backward-integration architecture provide the means; and the ambition of its leadership team shaped by forty years of building something from nothing in Ahmedabad provides the drive. The direction is clear. The transformation is underway. The nation needs what TARIL makes, and TARIL is being built to deliver it at a scale commensurate with that need.
OUTLOOK
Managements outlook for FY 2026-27 is confident but disciplined, grounded in specific, disclosed commitments rather than aspiration. The Company enters FY27 with the fundamentals in place: a Rs.5,005 crore order book, approximately 75,000 MVA of installed capacity, a fully backward-integrated structure taking shape, and an inquiry pipeline exceeding Rs.23,000 crore that reflects the strongest demand environment in the Companys history. The near-term task is to convert these structural advantages into execution quality, margin recovery and cash generation.
| Product Line | Primary Growth Driver | Key Risk | Confidence |
| Power transformers (HV/ EHV) | NEP transmission build-out; 220-765 kV demand | Copper cost; lead times | High |
| HVDC converter transformers | PGCIL approval; 33.25 GW pipeline | Securing manufacturing approval | Building |
| Furnace transformers | Metals capex; global niche demand | Industrial cycle | High |
| Reactors | Renewable evacuation; grid stability | Order timing | High |
| Distribution transformers | DISCOM modernisation (RDSS) | Price competition | Moderate |
| Specialty / Rectifier / Traction | Railways, industrial, green hydrogen | Order lumpiness | Moderate- High |
| Exports | US/EU grid replacement; tariff easing | Currency; certification | Building |
The realistic expectation is continued strong revenue growth in FY27, with margins stabilising as backward integration ramps, followed by a step-up in both margins and return on capital from FY28 as the new capacity is absorbed and the working-capital cycle matures. The Company is at the inflection point its
Annual Report theme describes: a transformation from a mid-sized transformer maker into a scaled, backward-integrated, high-voltage and HVDC- capable supplier to a nation investing Rs.9.15 lakh crore in its transmission grid. The direction is firmly towards transformation that powers the nation.
CAUTIONARY STATEMENT
This Management Discussion and Analysis contains statements that may constitute "forward-looking statements" within the meaning of applicable securities laws and regulations, including the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. These statements describe the Companys objectives, projections, estimates, expectations and intentions, and may be identified by words such as "anticipate," "believe," "expect," "intend," "plan," "project," "will," "target" and similar expressions. They include, without limitation, statements regarding the Companys ambition to progress towards US$1 billion of revenue, the ramp-up of installed capacity, the timeline for and benefits of its backward-integration facilities, the conversion of its order book and inquiry pipeline, its entry into HVDC transformer manufacturing, and the expected normalisation of its working-capital cycle and recovery of margins from FY28.
These forward-looking statements are based on certain assumptions and expectations of future events that are, by their nature, subject to risks and uncertainties specific to the Companys business. Actual results could differ materially from those expressed or implied. Important factors that could cause such a difference include, but are not limited to: volatility in the prices and availability of key raw materials, particularly copper, grain-oriented electrical steel and transformer oil; the pace and quality of execution of the Companys capacity-expansion and backward-integration projects; the Companys ability to normalise its working-capital cycle and fund its planned capital expenditure; the timing and volume of order awards by utilities and other customers; competition in the transformer industry; dependence on a single product segment and on manufacturing concentrated in Gujarat; the receipt and continuation of product approvals and accreditations; changes in government policy, public capital-expenditure plans, tariffs and regulation; foreign-exchange and interest-rate movements; and broader macroeconomic and geopolitical conditions as described in Section 1 and Section 5 of this report.
The Company does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report, and to read them together with the risks and concerns set out in Section 5 and the audited financial statements of which this Management Discussion and Analysis forms part.
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