Synopsis: Shares of TGV SRAAC Limited declined 8.52 percent after the company reported a transformer failure that had temporarily halted production of key chemical products for nearly two months.
A chemical stock witnessed sharp selling pressure after the company reported an unexpected operational disruption at its manufacturing facility. Investors reacted negatively to the announcement, which indicated a temporary production halt likely to impact near-term volumes and margins.
TGV SRAAC Limited, with a market capitalization of Rs. 1,266.87 crore, opened at Rs. 123 on the BSE against the previous close of Rs. 126.80. The stock hit an intraday low of Rs. 116, marking a decline of 8.52 percent from its previous close.
What’s the News?
The company reported that the winding in a transformer supplied by Transformers and Rectifiers India Ltd. has failed, resulting in a temporary shutdown. The incident has led to a production loss of around 120 tonnes per day (TPD) of caustic soda and 106 TPD of chlorine. This impact is expected to persist for approximately 60 days. TGV SRAAC stated that it is in contact with the supplier to undertake rewinding of the transformer and is simultaneously exploring alternative options to resume production at the earliest.
Financial Snapshot – Q1 Summary
On a quarter-on-quarter basis, TGV SRAAC reported steady growth across all major financial metrics in Q1FY26. Revenue rose 0.8 percent to Rs. 491 crore from Rs. 487 crore in the previous quarter. Operating profit increased sharply by 61 percent to Rs. 95 crore from Rs. 59 crore, while profit before tax grew 73.3 percent to Rs. 52 crore from Rs. 30 crore. Net profit jumped 77.3 percent sequentially to Rs. 39 crore from Rs. 22 crore in Q4FY25.
Year-on-year, the company delivered robust growth across parameters. Revenue rose 29.6 percent from Rs. 379 crore in Q1FY25 to Rs. 491 crore in Q1FY26. Operating profit more than doubled, rising 126.2 percent from Rs. 42 crore to Rs. 95 crore. Profit before tax surged 173.7 percent from Rs. 19 crore to Rs. 52 crore, while net profit grew 178.6 percent from Rs. 14 crore to Rs. 39 crore, indicating strong operational leverage and improved cost efficiencies over the year.
About the Company
TGV SRAAC Limited is a diversified chemical manufacturer engaged in the production and sale of chlor-alkali chemicals, chloromethanes, castor oil derivatives, and fatty acids. The company operates through two main business segments, Chemicals and Oils & Fats, catering to both domestic and international markets. Incorporated in 1981 and headquartered in Kurnool, India, the company was formerly known as Sree Rayalaseema Alkalies and Allied Chemicals Ltd. before adopting its current name in October 2017.
-Manan Gangwar
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