1 high quality stock at 90% Discount - Future Multibagger?

Summary

Transformers & Rectifiers, a leading transformer manufacturer in India, is poised for rapid growth, with projected sales rising from Rs 1,200 crores to Rs 8,500 crores in three years. The company stands out in the power sector due to its diversified portfolio, producing not only power transformers but also reactors and essential components in-house, boosting its profit margins. With a strong demand for both transformers and reactors across multiple industries, the company's recent growth in revenue and profits signals a promising future. Its stock has recently gained 16-17%, making it an attractive investment option.

Takeaways

• 😀 The company discussed in the video is in the power sector, specifically focusing on transformers and reactors.
• 😀 The company, Transformers & Rectifiers, is projected to grow rapidly, with a forecasted 400-500% business expansion over the next 3 years.
• 😀 The power sector is a hot industry, with strong growth potential, particularly for transformer companies with fewer competitors.
• 😀 Transformers are crucial in the electrical value chain, altering voltage for electricity transmission from generation sources to end users.
• 😀 Transformers & Rectifiers is unique because it manufactures not only transformers but also reactors, which complement their core business.
• 😀 Reactors help stabilize electrical power in large industries, driving up demand for both transformers and reactors.
• 😀 Unlike many transformer companies that focus on one type of transformer, Transformers & Rectifiers manufactures all kinds: power, distribution, and furnace transformers.
• 😀 The company’s backward integration strategy, where it makes key components for its transformers, is aimed at increasing margins and efficiency.
• 😀 Transformers & Rectifiers is looking to sell these components to other companies, expecting to increase margins from 20% to 25%.
• 😀 Recent financial results show significant growth, with revenue increasing from Rs 250 crores to Rs 470 crores and profits jumping from Rs 1 crore to Rs 46 crores.
• 😀 The speaker has shared the stock with their members, seeing a 16-17% rise since the recommendation and suggests joining their service for more insights.

Q & A

What is the projected growth for the company mentioned in the video?

The company is expected to grow its business from Rs 1,200 crores last year to Rs 8,500 crores in the next three years, indicating a significant growth potential.

Which sector does the company belong to?

The company operates in the power sector, which is one of the fastest-growing sectors in India.

What makes the transformer sector different from other sectors in the power industry?

Unlike solar EPC companies, which face lower margins due to high competition, transformer companies benefit from high demand and fewer large-scale players, allowing them to maintain higher profit margins.

Why are transformers essential in the power sector?

Transformers are crucial for altering voltage at various stages between power generation and consumption. They enable electricity to be transmitted efficiently over long distances to homes and factories.

What is unique about the company 'Transformers & Rectifiers'?

This company stands out because it manufactures a wide range of transformers across multiple industries, including agriculture, railways, power, cement, mining, and pharmaceuticals, whereas most transformer companies focus on just one sector.

What are reactors, and why are they important for industries?

Reactors are a type of transformer used to stabilize electrical power in large industries. When industries purchase transformers, they often also need reactors to ensure stable operations.

How does the company 'Transformers & Rectifiers' benefit from making reactors?

By manufacturing both transformers and reactors, the company gains additional revenue and higher demand from industries needing both products, thereby boosting their business.

What is meant by 'backward integration' in the context of this company?

Backward integration refers to the company's strategy of producing its own parts for transformers instead of buying them from other companies, which helps improve profit margins by controlling more of the supply chain.

What are the projected financial improvements for 'Transformers & Rectifiers'?

The company has shown significant growth, with revenue rising from Rs 250 crores to Rs 470 crores and profits increasing from Rs 1 crore to Rs 46 crores over the past year.

Why is 'Transformers & Rectifiers' considered an attractive investment opportunity?

The company is poised for continued growth due to high demand for transformers and reactors, as well as its strategy of backward integration and expanding its manufacturing capabilities. This combination of factors has driven strong financial performance.