Broker’s call: Voltamp Transformers (Buy)

BUSINESS

Broker’s call: Voltamp Transformers (Buy)

AIMPWA

May 6, 2025

Table of Content

Target: ₹11,350

CMP: ₹7,909.55

We maintain Buy on Voltamp Transformers (VAMP) while cutting our target price by about 15 per cent to ₹11,350 from ₹13,350 earlier.

VAMP’s Q4-FY25 results were ahead of estimates due to higher than estimated volume and realisation. The higher volume (9.4 per cent y-o-y) included a spillover from last year. Revenue/EBITDA/PAT was up 24/16/4 per cent y-o-y at ₹620 crore/₹120 crore/₹96.80 crore. EBITDA margin declined by 135bps y-o-y to 18.6 per cent as gross margin fell by 300bps/230bps y-o-y/q-o-q to 27 per cent. PAT growth was impacted by lower other income and higher tax rate.

The management indicated a healthy and sustaining enquiry pipeline across end-markets, especially renewable projects, aided by steady growth in domestic demand. The announced capacity addition plan of 6,000MVA is on track. The BoD declared dividend of Rs100/share. We believe VAMP would be a key beneficiary of India’s renewable capacity addition, private capex revival, and GoI’s PLI initiatives in the manufacturing space. VAMP’s current strong order-book (₹980 crore, +26 per cent y-o-y), coupled with the enquiry base, robust balance sheet, and improved cyclical demand tailwinds, grants us a more constructive outlook on the stock.

Published on May 6, 2025

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