Transformers And Rectifiers Targets $1-Billion Revenue By FY28 On Strong Backwards Integration
The transformer manufacturing company's drive for profitability is being powered by improved operational efficiencies and cost-reduction measures.
Transformers and Rectifiers India Ltd. is targeting $1 billion in revenue over the next three years, according to Group Chief Financial Officer Chanchal Rajora.
He also mentioned the revenue target for FY26. "The coming year, we will be doing around Rs 3,500 crore of revenue," he said during a conversation with NDTV Profit on Wednesday.
"Three years down the line, we want to reach a billion-dollar revenue. We will be nearing around 20% on the Ebitda margin and, more importantly, the PAT (profit after tax) will be more than 10% to 11%," Rajora said. "When I am talking about the PAT, I am talking about pure operational PAT, nothing related to interest or other income."
The transformer manufacturing company's drive for profitability is being powered by improved operational efficiencies and cost-reduction measures, rather than simply increasing sales prices. A key strategy is the push towards backward integration.
"We are targeting to become fully backward integrated by the middle of the next financial year. Once the backward integration takes place, I will have a leverage of two to two-and-a-half per cent on the margin, as well as the backward integration is going to help me increase my revenue," the top executive underlined.
He explained that the backward integration would reduce dependency on external forces, while aiding the increase in revenue by bringing operational efficiency into the system.
The company is confident of securing total orders worth close to Rs 8,000 crore by the end of the current financial year. It has reported an order inflow of approximately Rs 650 crore in the first quarter, with one-third of this coming from exports. The company's order book currently stands at Rs 5,400 crore.
For the last two years, the order mix has been balanced, with 50% from utilities and 50% from the industrial sector.
The company is investing close to Rs 500 crore in this financial year towards backward integration. It will also fund the organic expansion of 22,000 MVA in the extra-high voltage transformer segments. "All this capex is going to be completed in the next 12–13 months, so that's why I'm telling you that by the next financial year, we will be 100% backward integrated," the CFO added.
