Transrail Lighting Limited is a premier engineering, procurement, and construction company specializing in power transmission and distribution. Led by industry veteran Digambar Chunnilal Bagde, the company has successfully executed over 200 projects across India and expanded operations to 58 countries, cementing its position in both domestic and international markets.
Key Business Segments:
Power Transmission and Distribution
Civil Construction
Poles and Lighting
Railways
With an integrated business model that includes in-house manufacturing, Transrail ensures cost efficiency and quality assurance, positioning itself as a formidable player in the infrastructure and energy sector.
Recent Developments
Massive Order Wins: Transrail reported order inflows exceeding ₹7,400 crore, reflecting a 90% YoY growth.
Financial Strength: Q3 FY25 saw a 91.9% YoY increase in net profit to ₹93.24 crore, with revenue surging 62.9% to ₹1,340 crore.
Innovation Partnership: Collaboration with Epsilon Composite (France) for High-Temperature Low-Sag (HTLS) conductors.
Sustainability Initiatives: Introduction of eco-friendly lighting products and investments in energy-efficient technologies.
Financial Performance
FY 2022-23
Revenue: ₹3,152 crore (+29.3% YoY)
Operating Profit: ₹434 crore (+62.3% YoY)
Net Profit: ₹107.6 crore
FY 2023-24
Revenue: ₹4,076.5 crore (+29.3% YoY)
Operating Profit Margin: 13.8% (up from 11.0% in FY23)
Net Profit: ₹233.2 crore (more than double from FY23)
Q1 and Q2 FY 2024-25
Q1 FY25: Revenue of ₹869 crore; Net profit of ₹51.74 crore
Q2 FY25: Revenue of ₹1,096 crore; Net profit of ₹55.11 crore (+19.07% YoY)
Pros and Cons
Pros:
Robust Order Book: ₹14,251 crore backlog ensures strong revenue visibility.
Global Expansion: Presence in 58 countries enhances revenue diversification.
Integrated Operations: In-house manufacturing improves efficiency and cost management.
Smart Lighting Innovation: Tech-enabled products align with global energy efficiency trends.
Cons:
High Working Capital Needs: EPC projects require significant upfront investment.
Geopolitical Risks: International market volatility may affect operations.
Government Dependence: 88% of revenue from government tenders increases policy risk.
Rising Competition: Market saturation and price competition could impact margins.
Future Outlook
TLL is poised for substantial growth, leveraging its strong order book, technological advancements, and expanding global footprint. Key growth drivers include:
Strategic Investments: Expansion into emerging markets, smart lighting, and sustainable energy solutions.
Manufacturing Scale-up: ₹326.6 crore capital investment approved for capacity enhancement.
Recent Challenges
Rising Raw Material Costs: Impacting operating margins.
Manufacturing Delays: Expansion projects facing minor commissioning delays.
Competitive Pricing Pressures: Affecting revenue from certain segments.
Valuation Justification
Debt-Equity Ratio: 0.56 (improved from 0.78 in FY23)
ROCE: 35.00% (up from 18.27%)
Net Profit Margin: 5.65% (up from 3.39%)
P/E Ratio: 30x (fair industry valuation)
P/B Ratio: 3.5x (reasonable given strong growth prospects)
Order Book Strength: Estimated at ₹14,251 crore as of February 28, 2025.
Closing Summary
The company is experiencing strong, sustained growth, fueled by strategic expansion, cutting-edge innovations, and a robust financial foundation. While challenges such as high capital intensity and increasing market competition remain, TLL’s commitment to sustainability, global expansion, and infrastructure development reinforces its leadership position in the EPC sector.
As of June 30, 2024, the company reported a confirmed order book of ₹10,213 crore, which further expanded to ₹11,499 crore by December 31, 2024. Strengthening its market presence, TLL secured additional orders worth ₹2,752 crore, bringing FY25 total order inflows to over ₹7,400 crore, reflecting a remarkable 90% year-on-year growth. With this momentum, TLL’s estimated order book stands at approximately ₹14,251 crore as of February 28, 2025, positioning the company for continued success and long-term expansion.
Acknowledging this strong momentum, CRISIL Ratings upgraded the company’s long-term bank facilities to 'CRISIL A+/Stable', highlighting its enhanced business risk profile and a solid order pipeline.
While these developments underscore TLL’s robust growth potential, investors are advised to take a balanced approach, factoring in execution capabilities, evolving market conditions, and the sustainability of growth in a competitive landscape. For long-term investors, TLL presents an attractive opportunity, supported by strong financials and strategic market positioning. Meanwhile, short-term traders should closely track technical indicators before making investment decisions.
Disclaimer: This analysis is for educational and informational purposes only and does not constitute any financial advice. As SEBI has clarified that individuals providing stock market education must use stock price data with a three-month lag. Accordingly, all data and charts presented here comply with these guidelines. Investors should conduct their own due diligence before making any investment decisions. Opinions expressed are personal, potentially biased, and may contain inaccuracies. Additionally, all figures are subject to verification.
Share this post