Voltamp Transformers: A Multibagger Opportunity

Diverse Industry Presence

Voltamp Transformers has established a significant presence across various industries, including power, data centers, green energy, steel, cement, oil & gas, and chemicals.

Transformers are essential devices for voltage regulation, ensuring a balance between high-voltage electricity generation and low-voltage consumption. Voltamp specializes in manufacturing power, distribution, and custom transformers that meet diverse industrial requirements.

Trusted by Industry Leaders

For over three decades, Voltamp has been a preferred supplier for leading EPC firms like Larsen & Toubro, TECHNIP, Thyssenkrupp, Toyo, Petrofac, Engineers India, Tata Projects, and Thermax. Global engineering giants, including SIEMENS, ABB, GE, and HITACHI, also source transformers up to 220 kV voltage class from Voltamp.

Financial and Operational Strength

Voltamp operates as a debt-free, professionally managed company with institutional holdings of 51%. Rated AA-STABLE by CARE Ratings, it holds the highest credit rating in India’s transformer industry.

Key financial metrics highlight its robust performance:

• Net Sales (₹ Cr): 1,127 (FY22) → 1,739 (TTM)

• Operating Profit (₹ Cr): 139 (FY22) → 356 (TTM)

• Net Profit (₹ Cr): 133 (FY22) → 343 (TTM)

• Return on Equity (ROE): 24.30%

• Return on Capital Employed (ROCE): 31.60%

• Debt-to-Equity Ratio: 0 (NIL)

Its P/E ratio of 29.84 remains favorable compared to the industry average of 65.70, further underscoring its value proposition.

Market Leadership and Capacity

Voltamp leads the Indian market for cast resin dry-type transformers, holding a 35% market share with over 22,000 installations. These transformers are manufactured using advanced technology from HTT, Germany, and ensuring compliance with global standards.

The company operates four manufacturing facilities in Gujarat with a combined installed capacity of 14,000 MVA.

Service Excellence

The dedicated Voltamp Service division helps customers optimize transformer lifecycle performance, offering maintenance solutions to enhance reliability and reduce downtime.

Order Book and Market Strategy

As of April 2024, Voltamp’s order book stood at ₹840.66 Crore, representing 7,839 MVA. It reported a 34% year-on-year growth in order inflows during the first nine months of FY24, reflecting its focus on profitable and selective growth.

Future Outlook

Voltamp is poised to capitalize on favorable market dynamics, driven by:

• Expansion plans, including a capacity increase to 20,000 MVA.

• Rising demand across renewable energy and infrastructure sectors.

• Continued focus on operational efficiency and financial stability.

Technical Outlook

The stock is currently in a correction phase, trading at ₹10,161 (as of Nov, 2024), down from its all-time high of ₹14,800. Despite its current bearish technical indicators, potential catalysts like stronger earnings or positive news could trigger a reversal. Investors should monitor key support and resistance levels for optimal entry and exit points.

---

Disclaimer: This document is for informational purposes only and may contain errors or biases. Conduct independent research before making any financial decisions.