Shares of Transformers and Rectifiers (India) Ltd (TARIL) declined sharply on Wednesday, falling 7.10 per cent to settle at Rs 309.55 after the company reported its March 2025 quarter (Q4 FY26) results.

Nuvama Institutional Equities noted that while TARIL posted a 16 per cent year-on-year (YoY) execution growth in Q4 FY26, it fell short of its full-year guidance across key parameters. The brokerage highlighted that the company's order book stood at around Rs 5,000 crore, significantly below the guided Rs 8,000 crore, primarily due to a steep 47 per cent YoY decline in order inflows. Revenue came in at Rs 2,500 crore versus the expected Rs 2,600 crore, while EBITDA margin was reported at 15.3 per cent, below the guided 16–17 per cent range. Additionally, cash flow from operations (CFO) turned negative at Rs 110 crore.

Looking ahead, the company has guided for FY27 revenue of Rs 3,200 crore, EBITDA margin in the range of 15–17 per cent, and a capital expenditure plan of Rs 600 crore over the next 15 months.

Following the earnings, Nuvama downgraded the stock to 'Reduce', citing a stagnant backlog -- at just about 2 times FY26 sales -- along with margin pressures and weak order inflows, which it believes could limit earnings visibility.

"Accordingly, we are cutting FY27E/28E EPS by 20 per cent and 13 per cent, respectively. Retaining a 25x FY28E PE multiple, we arrive at a revised target price of Rs 295 (earlier Rs 334). At the current market price, the stock is trading at 34x/29x FY27E/28E EPS," the brokerage said.

From a technical perspective, an analyst remain cautious on the stock's near-term trajectory. AR Ramachandran, a Sebi-registered research analyst at Tips2trades, said the stock appears bearish on daily charts, with strong resistance placed at Rs 333. "A daily close below the support level of Rs 298 could trigger a decline towards Rs 233 in the near term," he added.

Transformers and Rectifiers (India) Ltd manufactures power, distribution and specialty transformers, offering a wide product portfolio ranging from 5 MVA to 1000 MVA and up to the 1200 kV class.