FORM 10-QSB



Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 
1934

For the quarterly period ended July 31, 1997

Commission File No. 2-33256


TOROTEL, INC.
(Exact name of small business issuer as specified in its charter)


         	MISSOURI		                					     44-0610086
(State or other jurisdiction of 					(I.R.S. Employer Identification No.)
 incorporation or organization)


13402 SOUTH 71 HIGHWAY, GRANDVIEW, MISSOURI  64030
(Address of principal executive offices)


(816) 761-6314
(Issuer's telephone number)


NONE
(Former name, former address and former fiscal year, if change since 
last report)


Check whether the issuer (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 12 months 
and (2) has been subject to such filing requirements for the past 90 
days.

Yes    X     No        	


As of September 8, 1997, there were 2,808,566 shares of Common 
Stock, $.50 Par Value, outstanding.


TOROTEL, INC. AND SUBSIDIARIES



INDEX



PART I.      FINANCIAL INFORMATION

	Item 1.   Financial Statements

<TABLE>
<S>                                                                        <C>
	          Consolidated Balance Sheet as of July 31, 1997					             1

	          Consolidated Statements of Operations for the three months
	               ended July 31, 1997 and 1996							                        2

	          Consolidated Statements of Cash Flows for the three months
	               ended July 31, 1997 and 1996							                        3

	          Notes to Consolidated Financial Statements					                 4

	Item 2.   Management's Discussion and Analysis or Plan of Operation			    8



PART II.     OTHER INFORMATION

	Item 1.   Legal Proceedings							                                       	10

	Item 6.   Exhibits and Reports on Form 8-K				                          		10



SIGNATURES									                                                      		11

</TABLE>

PART I.   FINANCIAL INFORMATION


Item 1.   Financial Statements

CONSOLIDATED BALANCE SHEET (Unaudited)
As of July 31, 1997

<TABLE>
<S>                                              <C>
ASSETS

Current assets:
Cash			                                      				$    136,000
Accounts receivable, net					                       1,881,000
Inventories (Note 3)						                          2,978,000
Prepaid expenses and other current assets			          155,000
                                         								   5,150,000

Property, plant and equipment, net				              1,756,000

Deferred tax asset (Note 4)					                      228,000

Other assets							                                    35,000

                                          								$ 7,169,000

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
	Current maturities of long-term debt (Note 5)  		$ 1,119,000
Current maturity of note payable to former 
officer (Note 6)	                                     148,000
Trade accounts payable	                      				   1,025,000
Accrued liabilities						                             536,000
                                         								   2,828,000

Long-term debt, less current maturities (Note 5)	   1,085,000

Note payable to former officer (Note 6)				           236,000

Commitments and contingency (Note 6)				              486,000

Stockholders' equity (Note 7): common stock, 
at par value	                                       1,440,000
Capital in excess of par value					                 8,672,000
Accumulated deficit				                        		  (7,373,000)
							                                         	   2,739,000
Less treasury stock, at cost					                     205,000
                                         								   2,534,000

                                          								$ 7,169,000
</TABLE>

   The accompanying notes are an integral part of these statements.




CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended July 31,
<TABLE>
<S>                     <C>           <C>

                							      1997        1996     	
                           									   (Note 2)   

Net sales	         					$  3,377,000	 $  4,067,000
Cost of goods sold					    2,451,000	    2,947,000

	Gross profit			    		       926,000	    1,120,000

Operating expenses:
Engineering			     			       207,000	       195,000
Selling, general and 
    administrative 			       604,000	       728,000
			               				       811,000	       923,000

Earnings from operations     115,000	       197,000

Other income (expense):
	Interest expense					       (67,000)	        (70,000)
Other, net 						            (70,000)	        (11,000)
               							      (137,000)	        (81,000)

Earnings (loss) before 
provision for income 
taxes and cumulative 
effect of change in 
method
  of accounting			  		        (22,000)	       116,000

Provision for income 
taxes (Note 4)			             -      	         40,000

Earnings (loss) before 
cumulative effect of 
change in 
method of accounting          (22,000)	         76,000

Cumulative effect of 
change in method of 
accounting	                      -     	      (506,000)	

Net earnings (loss)		  			$     (22,000)	 $    (430,000)


Earnings (loss) per 
common and common 
equivalent share:
 Earnings (loss) before 
      cumulative effect	       $ (.01)	           $  .03
 Cumulative effect					           -  	              (.18)	
							                        $ (.01)	           $ (.15)

Weighted average common 
and common equivalent
	shares outstanding				  	    2,808,000	    2,810,000

</TABLE>

    The accompanying notes are an integral part of these statements.









2

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended July 31,

<TABLE>
<S>                                                <C>           <C>
                                            							     1997     	     1996    	
									                                                           (Note 2)  
Cash flows from operating activities:
Net earnings (loss)		                          	 		$   (22,000) 	$   (430,000)

Adjustments to reconcile net earnings to net cash
   provided by operations:
	Loss from estimated government penalty	               70,000	           -      
Depreciation and amortization			                        85,000	        75,000
Deferred tax asset				                                  -     	        40,000
Increase (decrease) in cash flows from operations
	   resulting from changes in:
Accounts receivable			                                   239,000	   1,124,000
Inventories				                                       (184,000)	     (508,000)
Prepaid expenses and other assets	                     (64,000)	       (73,000)
Trade accounts payable			                               72,000	      151,000
Accrued liabilities				                                 64,000	       (23,000)
                                            						      282,000	      786,000

Net cash provided by operating activities	       	      260,000	      356,000

Cash flows from investing activities:
Capital expenditures		                       		       (26,000)	       (31,000)

Net cash used in investing activities		       	       (26,000)	       (31,000)

Cash flows from financing activities:
Borrowings against credit line		     	                   100,000	   2,929,000
Payments against credit line		                   	     (370,000)	  (3,104,000)
Principal payments on long-term debt		                (21,000)	       (18,000)
Payments on capital lease obligations		               (4,000)	         (3,000)
Proceeds from issuance of common stock		               1,000	          1,000

Net cash used in financing activities			              (294,000)	     (195,000)

Net increase (decrease) in cash	                			  $  (60,000)	 $    130,000
Cash at beginning of year				                           196,000	      149,000

Cash at end of July		                             			$   136,000	 $    279,000


Supplemental Disclosures of Cash Flow 
Information
Cash paid during the period for:
Interest		                                       				$    55,000	  $  108,000
Income taxes		                                    			$      -     	$     -     

</TABLE>

     The accompanying notes are an integral part of these statements.


3

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)



Note 1 - Basis of Presentation

	The accompanying unaudited consolidated financial 
statements reflect the normal recurring adjustments which are, in the 
opinion of management, necessary to present fairly the company's 
financial position at July 31, 1997, and the results of operations for 
the three months ended July 31, 1997.
	The financial statements contained herein should be read in 
conjunction with the company's financial statements and related 
notes filed on Form 10-KSB for the year ended April 30, 1997.


Note 2 - Restatement for Change in Accounting Method

	The amounts shown on the accompanying consolidated 
statements of operations for the three months ended July 31, 1996, 
differ from those reported originally due to the retroactive application 
of the change in method of accounting which was adopted during the 
second quarter of the fiscal year ended
April 30, 1997.  The effect of retroactive application of the new 
method is summarized in the following table:

<TABLE>
<S>                                                  <C>           <C>
                                        								      Three Months Ended      
								                                                July 31, 1996        	
                                             								As Restated 	 As Reported

	Net sales			                                     			$  4,067,000	 $  3,917,000
	Gross profit						                                   1,120,000	     1,019,000
	Earnings before cumulative effect of change in
	     method of accounting				                         76,000	          10,000
	Cumulative effect of change in method of accounting   (506,000)	       -     	

	Net earnings (loss)			                            		$  (430,000)	 $  10,000	

	Earnings (loss) per share:
	     Earnings (loss) before cumulative effect	      $ .03	            $ .00
	     Cumulative effect					                           (.18)	            -   	
                                 								            $(.15)	            $ .00	
</TABLE>

Note 3 - Inventories

	The components of inventories are summarized as follows:

<TABLE>
<S>                                                            <C>
 Raw materials, less allowance for obsolescence of $801,000	   $ 1,692,000
 Work in process							                                            869,000
 Finished goods							                                             417,000

                                                       								$ 2,978,000
</TABLE>

4

Note 4 - Income Taxes

	The net deferred tax asset included in the accompanying 
consolidated balance sheet at July 31, 1997, includes the tax effects 
of temporary differences and carryforwards which are the source of 
the deferred asset, less a valuation allowance.
	The components of the net deferred tax asset are 
summarized as follows:

<TABLE>
<S>                                 <C>
Net operating loss carryforwards				$ 1,954,000
Inventory valuation reserve					      245,000
Tax credit carryforwards					         406,000
Property, plant and equipment					      188,000
Other			                  					        60,000
								                              2,853,000
Less valuation allowance				     	   2,625,000

                            								$  228,000
</TABLE>

	The tax credit and operating loss carryforwards expire in 
various amounts in the years 1997 through 2012.


Note 5 - Long-term Debt

	On September 2, 1997, the company renewed its revolving 
credit agreement with Phillipsburg National Bank & Trust Company 
(PNBT).  The credit agreement, which provides a $2,500,000 
revolving credit line, expires August 31, 1998.  Advances under the 
credit line are limited to the sum of 75% of eligible billed receivables 
and 50% of inventories, net of reserves.  The revolving credit line is 
collateralized by trade accounts receivable, inventories, and a third 
lien mortgage on OPT's facility.  Under the terms of the agreement, 
the outstanding balance of the revolving line bears interest at 1/2% 
over the bank's prime lending rate.  As of July 31, 1997, the 
company had utilized $586,000 of the revolving credit line and the 
effective borrowing rate was 9%.  The company is required to 
comply with certain covenants including restrictions on the payment 
of cash dividends.
	The company has a $500,000 note with NationsBank 
(formerly Boatmen's Bank IV) dated November 29, 1994.  The note 
is collateralized by the land and buildings in Grandview, Missouri, 
and the unimproved land in Kansas City, Missouri.  Under the terms 
of the note, the company is required to comply with certain financial 
covenants.  At April 30, 1997 and 1996, the company was in 
violation of an annual financial coverage ratio covenant contained in 
the note, and at October 31, 1996, January 31, 1997, April 30, 1997, 
and July 31, 1997, the company was in violation of a quarterly net 
worth covenant contained in the note.  As of the filing of this Form 
10-QSB, the bank has not waived compliance with the subject 
provisions as of July 31, 1997.  One of the remedies available to the 
bank is to demand full payment of the outstanding balance, which is 
$457,000 at July 31, 1997.  Since the note matures on November 
29, 1997, the company does not expect the bank to make such a 
demand.  While the company has the liquidity available to pay-off 
the note, management believes another source of financing will be 
in place on or before the maturity date of the note.


5

Note 6 - Contingency for Estimated Penalty

	On May 6, 1997, Torotel Products, Inc. was accepted into 
the Voluntary Disclosure Program of the United States Department 
of Defense, resulting from its failure to perform some required 
"thermal shock" testing as frequently as required, and inaccurately 
certifying that all required testing had been performed.  As a result 
of the company's investigation into the thermal shock deficiencies, 
which was first reported in November 1996, the company recorded 
an estimated charge of $416,000 against earnings in its fiscal fourth 
quarter ended April 30, 1997.  Because the investigation has been 
ongoing, the company recently determined that there also were 
some deficiencies in performing some required electrical testing as 
frequently as required.  As a result, the company recorded an 
additional estimated charge of $70,000 against earnings in its fiscal 
first quarter ended July 31, 1997.  The aggregate amount of the 
estimated penalty is still subject to fluctuation as further evidence is 
investigated.  The company continues to cooperate as the 
government conducts its investigation and continues to pursue the 
existence of other damages.
	At this time, the company is not certain when payment of the 
damage amount will be required; however, the company does not 
anticipate making any payments during the next twelve months.  As 
a result, the entire $486,000 has been classified as a long-term 
liability in the accompanying consolidated balance sheet.
	The company believes that certain of its former officers may 
have been responsible for the misconduct related to the test failures, 
and continues to evaluate ways of recovering the damages.  In the 
meantime, the company has suspended all payments under a note 
payable to a former officer.


Note 7 - Employee Stock Options

	Employee stock options are accounted for under APB 
Opinion 25, Accounting for Stock Issued to Employees, and related 
interpretations.  The exercise price of each option equals the market 
price of the company's common stock on the date of grant.  
Accordingly, no compensation cost has been recognized.  The 
company chose not to adopt Statement of Financial Accounting 
Standards 123, Accounting for Stock-Based Compensation.  The 
difference in the two methods of accounting for stock options is not 
deemed to have a material effect on the fair value of the options at 
the grant date.
	Stock option transactions under the 1994 Incentive 
Compensation Plan for the three months ended July 31, 1997 and 
1996, are summarized as follows:

<TABLE>
<S>                <C>        <C>        <C>        <C>
					                     1997                1996                  	
		              			Weighted	           		Weighted
			              		 Shares  	 Average  	 Shares	  	 Average  
				                Under   	 Exercise 	  Under 	   Exercise  
             					  Option     Price   	  Option 	   Price   	

Outstanding at 
 beginning of year	 150,000	    $1.00	       -         -       
Granted				           -		        -    	       -        -     
Exercised 				        -          -            -        -        
Forfeited 				        -          -           -         -        
Outstanding at 
 end of July 		     150,000	    $1.00	       -         -     

</TABLE>
<TABLE>
<S>                      <C>        <C>        <C>        <C>
					                           1997                  1996                  	 
                    					Weighted		           	Weighted
			                    		 Shares  	 Average  	  Shares		  Average  
				                   	  Under   	 Exercise  	  Under  	 Exercise  
                   					  Option 	   Price   	  Option 	    Price   	

Options exercisable 
 at end of July	            -          -           -          -       

Weighted average fair 
 value of options 
 granted during the 
 year		            	                   -            			        -        	

</TABLE>
The following information applies to options outstanding at July 31, 1997:

<TABLE>
<S>                                           <C>
Number outstanding						                      150,000	
Range of exercise prices					                 $1.00	
Weighted average exercise price				           $1.00	
Weighted average remaining contractual life		 8.4 years

</TABLE>

7

Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR 
PLAN OF OPERATION



	The discussion and analysis of the results of operations 
includes the operations of Torotel, Inc., and its subsidiaries, Torotel 
Products, Inc. and OPT Industries, Inc.


THREE MONTHS ENDED JULY 31, 1997 VERSUS THREE 
MONTHS ENDED JULY 31, 1996

	Net sales decreased 17%.  The net sales of Torotel 
Products decreased 10% from $1,761,000 to $1,576,000 due 
primarily to a lower shippable backlog position at the beginning of 
the quarter and the elimination of some lower-margin jobs for non-
major customers.  These decreases were offset partially by a 
$113,000 increase in sales of the potted coil assembly for the 
Hellfire II missile system.  OPT's net sales decreased 22% from 
$2,306,000 to $1,801,000 due primarily to lower sales of immersion 
power supplies to a major customer.
	Gross profit as a percentage of net sales decreased slightly.  
The gross profit percentage of Torotel Products increased 4% due 
primarily to lower material costs and lower fixed production costs.  
The gross profit percentage of OPT decreased 4% due primarily to 
lower sales volume without a comparable decrease in fixed 
production costs.
	Engineering expenses increased 6%.  The engineering 
expenses of Torotel Products increased 3% from $71,000 to 
$73,000 due primarily to education and training costs.  The 
engineering expenses of OPT increased 8% from $124,000 to 
$134,000 due primarily to a $5,000 increase in depreciation, a 
$3,000 increase in travel costs, and a cost of $2,000 for recruiting 
expenses.
	Selling, general and administrative (SG&A) expenses 
decreased 17%.  The SG&A expenses of Torotel, Inc. decreased 
24% from $70,000 to $53,000 due primarily to a $9,000 decrease in 
professional fees, a $4,000 decrease in travel costs, and a $4,000 
decrease in consulting charges.  The SG&A expenses of Torotel 
Products decreased 20% from $376,000 to $299,000 due primarily 
to a $107,000 decrease in payroll costs due to a reduction in 
personnel, a $12,000 decrease in bank charges, a $5,000 decrease 
in sales commissions, and a $3,000 decrease in advertising costs.  
These decreases were offset partially by a $50,000 increase in 
professional fees.  The SG&A expenses of OPT decreased 11% 
from $282,000 to $252,000 due primarily to a $9,000 decrease in 
payroll costs, a $7,000 decrease in bank charges, a $4,000 decrease 
in advertising costs, a $4,000 decrease in professional fees, a 
$4,000 decrease in computer maintenance costs, and a $2,000 
decrease in office supplies.
	Interest expense decreased 4%.  The interest expense of 
Torotel, Inc. decreased 9% from $11,000 to $10,000 due to a lower 
interest-bearing balance on the note payable to a former officer.  
The interest expense of Torotel Products increased 38% from 
$21,000 to $29,000 due to a higher aggregate borrowing level.  The 
interest expense of OPT decreased 26% from $38,000 to $28,000 
due to a lower aggregate borrowing level.
	Sundry non-operating expense increased due to a $70,000 
charge in the current fiscal quarter for an estimated penalty as 
discussed in Note 6 of Notes to Consolidated Financial Statements.
	For the reasons discussed above, consolidated pretax 
earnings decreased from a profit of $116,000


8
to a loss of $22,000.  The pretax loss of Torotel, Inc. decreased from 
a loss of $81,000 to a loss of $63,000.  The pretax earnings of 
Torotel Products increased from $38,000 to $49,000.  The pretax 
earnings of OPT decreased from a profit of $159,000 to a loss of 
$8,000.
	Provision for income taxes decreased due to lower pretax 
earnings.


LIQUIDITY AND CAPITAL RESOURCES

	Historically, the company has relied on funds generated 
internally and bank borrowings to meet its normal operating 
requirements and to service bank indebtedness.  As discussed in 
Note 5 of Notes to Consolidated Financial Statements, the company 
has renewed its revolving credit line with Phillipsburg National Bank 
& Trust Company through August 31, 1998.
	During the three months ended July 31, 1997, the 
company's operating activities generated $260,000 in cash flow.  
Corporate related matters used $67,000.  The operations of Torotel 
Products provided $143,000 due primarily to pretax earnings plus 
non-cash charges.  OPT's operations provided $184,000 due 
primarily to a lower level of receivables.  Management's objective is 
to continue strengthening the company's liquidity position through 
improved operations and asset management.
	Investing activities used $26,000 in cash flow for capital 
expenditures for production and engineering equipment.  For the 
balance of the fiscal year, the company anticipates additional 
investments of approximately $300,000 for capital expenditures.
	Financing activities used $294,000 in cash flow due 
primarily to reductions in the revolving credit line.  At July 31, 1997, 
the company had used $586,000 of its revolving credit line and had 
$1,914,000 available for future cash requirements, based on the 
lender's borrowing base formula.  As discussed in
Note 5 of Notes to Consolidated Financial Statements, the company 
is in violation of certain financial covenants under the terms of a 
note payable to NationsBank.  As of the filing of this Form 10-QSB, 
the bank has not waived compliance with the subject provisions.  
One of the remedies available to the bank is to demand full payment 
of the outstanding balance, which is $457,000 at July 31, 1997.  
Since the note matures on November 29, 1997, the company does 
not expect the bank to make such a demand.  While the company 
has the liquidity available to pay-off the note, management believes 
another source of financing will be in place on or before the maturity 
date of the note.
	The company believes that inflation will have only a minimal 
effect on future operations since such effects will be offset by sales 
price increases which are not expected to have a significant effect 
upon demand.


OTHER

	Except for historical information contained herein, certain of 
the matters discussed above are forward-looking statements that are 
subject to certain risks and uncertainties that could cause actual 
results to differ materially from those set forth in the forward-looking 
statements, including the company's dependence on timely 
development, introduction and customer acceptance of new 
products, the impact of competition and price erosion as well as 
supply and manufacturing constraints, and other risks and 
uncertainties (see Note 6 of Notes to Consolidated Financial 
Statements).

9

PART II.   OTHER INFORMATION



Item 1.   Legal Proceedings

	There are two legal proceedings involving the company.  In 
the first matter, Torotel, Inc. and Torotel Products, Inc. have both 
been named as defendants in a lawsuit brought by Joseph Turner in 
the U.S. District Court for the Western District of Missouri.  The case 
number is 96-0646-CV-W-5 and was filed on June 18, 1996.  
Plaintiff alleges a racially motivated failure to hire.  The company 
believes it has a meritorious defense and is vigorously defending the 
case.  Plaintiff has moved to have the case certified as a class 
action.  A hearing on the class certification motion was held on May 
21, 1997, but there has been no ruling to date on that motion.
	In the second matter, on May 6, 1997, Torotel Products, Inc. 
was accepted into the Voluntary Disclosure Program by the 
Inspector General of the United States Department of Defense, 
resulting from its failure to perform some required testing as 
frequently as required, and inaccurately certifying that all required 
testing had been performed.  As a result of the company's 
investigation into the testing deficiencies, the company has recorded 
an estimated charge of $486,000.  This estimated penalty is still 
subject to fluctuation as further evidence is investigated.  The 
company continues to cooperate as the government conducts its 
investigation, and continues to pursue the existence of other 
damages.  The company believes that certain of its former officers 
may have been responsible for the misconduct related to the test 
failures, and is evaluating ways of recovering the damages.  In the 
meantime, the company has suspended all payments under a note 
payable to a former officer.


Item 6.   Exhibits and Reports on Form 8-K

	a)	Exhibit 27 -- Financial Data Schedule (electronic filings only)

b)	Reports on Form 8-K --

There was one report filed on Form 8-K during the 
three months ended July 31, 1997, as required by 
Item 5 of Form 8-K.  The report, filed May 14, 1997, 
included information on the terminated stock sale to 
Brockson Technologies Group LLC.












10

SIGNATURES



	In accordance with the requirements of the Securities 
Exchange Act of 1934, the Registrant caused this report to be 
signed on its behalf by the undersigned, thereunto duly authorized.


Torotel, Inc.
(Registrant)




Date:   September 11, 1997  				/s/  H. James Serrone                   	
                              							H. James Serrone
                              							Vice President of Finance and 
                              							Chief Financial Officer



11