| Extensive industry experience of the promoters:
The promoters have around two decades of experience in the industry and have developed strong relationship with customers. The managing director of the company is Mr. Dharmendra Sharad Gor and the director is Mrs. Neera Dharmendra Gor who have around 2 decades of experience in this industry. Additionally, an experienced management who have knowledge about the industry in which TRL functions should continue to support the business risk profile.
Scale of Operation:
TRL’s revenue grew sharply to Rs. 71.07 crore in FY25 from Rs. 46.90 crore in FY24, driven primarily by its Wastewater Treatment Technology Plant contributing ~97% of revenue, with the balance from the solar thermal segment; in FY26, the company expanded its solar thermal business and expects 25–30% contribution from this vertical, alongside new opportunities in the sugar and dairy segments. Despite this growth, operating margin declined to 28.45% in FY25 from 35.44% in FY24 due to higher raw material costs, while PAT margin fell to 17.21% from 23.42% owing to increased depreciation. The company maintains an order book of Rs. 303.75 crore, including Rs. 273.17 crore Andhra Pradesh government project delayed due to change in the state government, procedural clearance delays, and the proposed expansion of the project area; however, additional orders are expected under the same project with execution expected to begin from Q2FY27.
In 9MFY26, TRL reported revenue of Rs. 28.28 crore, an operating margin of ~9%, and a PAT margin of –6%, mainly due to the reversal of a Rs. 13.77 crore invoice raised in FY23–24 because of a GST issue, leading to lower revenue and net losses during this period. However, Acuité believes that operating performance may improve in the medium term supported by timely execution of the order and securing of new orders, though profitability sustainability remains a key monitorable.
Moderate Financial Risk Profile:
The Financial risk marked by moderate net worth, low gearing levels, and healthy debt coverage indicators. The tangible net worth of the company stood at Rs. 94.31 crore in FY 25 as against Rs.62.56 Cr. as on March 31, 2024 on account of equity infusion by converting share warrants and internal accruals. The gearing of the company stood low at 0.09 times as on 31 March 31, 2025. The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) and Debt/EBITDA stood at 0.43 times and 0.41 times as on March 31, 2025. The debt protection metrices of the company remain comfortably marked by Interest coverage ratio (ICR) of 35.61 times and debt service coverage ratio (DSCR) of 3.69 times for FY 2025. Acuite believes financial risk profile of TRL stood healthy in the medium term supported by debt funded capex plan.
|
| Intensive Working Capital Management:
The company’s working capital management remains intensive, though showing some improvement, with GCA days reducing to 601 days in FY25 from 655 days in FY24; however, it continues to be constrained by high debtor and inventory levels along with elevated other current assets. Debtor days increased to 309 days in FY25 from 224 days in FY24 due to retention terms wherein around 25% of billing is withheld until project completion, with ~34% of receivables outstanding for over one year as of 9MFY26., while the company is planning to shift towards larger corporates is expected to support better collection efficiency. Inventory days rose to 162 days in FY25 from 139 days in FY24 due to higher build-up of finished goods inventory reflecting in FY 25. Average inventory days generally lies between 4 to 6 months. While creditor days, though still high, improved to 172 days in FY 25 from 251 days in FY 24. Additionally, other current assets remained elevated due to advances extended to suppliers. Acuite believes working capital management improve on account of constant monitoring of receivables and inventory management however timely collection from the debtors will remain key monitorable.
Intense Competition
TRL faces intense competition from organized and unorganized players which may adversely affect business operation and financial condition. Moreover the company has a limited product portfolio when compared to industry peers in the organized sector which may affect the ability to compete effectively. TRL also has various types of R&D tie-ups with Renewable Research labs Universities and also an in-house Research centre to develop new applications and products on the Renewable Energy front.
|
