Voltamp Transformers Stock Analyzed by Emkay Global

Emkay Global Financial has kept its “Buy” recommendation for Voltamp Transformers, but they’ve lowered their predicted price to ₹10,000 – down from ₹11,350 previously. They’re basing this on a valuation of 25 times Voltamp’s expected earnings per share in 2028.

Key Points

• “Buy” rating maintained by Emkay Global Financial.
• Target price cut to ₹10,000, down 12%.
• Voltamp holds 15% of industrial transformer market share.
• 85% of revenue comes from private clients’ sales.
• Strong order growth – 37% YoY in FY24/25/26.
• New facility adds 6,000 MVA capacity by FY27.

Voltamp’s strong position comes from creating their own designs and building transformers. Most of their sales go to companies that aren’t publicly listed.

The brokerage still thinks Voltamp will grow quickly, thanks to building more factories and having a small debt. They also see lots of new orders coming in.

Voltamp is getting lots of orders – up 37% each year for the next three years. This is because they sell to companies building roads, mines, and big buildings, plus they’re selling transformers to power companies like GETCO.

Voltamp’s leaders say there are many requests for new transformers, and that the economy is growing. They currently have orders worth about ₹1,400 crore, which is like buying about 0.7 times what the company sold last year.

To meet demand, Voltamp is building a new factory that will add 6,000 MVA of capacity. This will cost ₹200 crore and will be paid for with money the company has saved. The new factory will be finished by early 2027.

The new factory will make transformers up to 220 kV. When it’s finished, Voltamp will be able to make 20,000 MVA of transformers, which will help them get more customers.

For a while, Voltamp was making a lot of money because there weren’t enough transformers to go around. But now more companies are building factories, so Voltamp’s profits might not be as high as before.

Voltamp’s profits were high because of a shortage of materials needed to make transformers. But now that supply is getting better, Voltamp’s profits might go down a little.

“Ultimately, Voltamp is a promising growth story, despite potential margin normalization.”