Accumulate Voltamp Transformers; target of Rs 14,922: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Voltamp Transformers with a target price of Rs 14,922 in its research report dated July 30, 2024.

Broker Research

August 02, 2024 / 10:14 IST

Accumulate

26 Aug, 2025 12:21

Volume

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Prabhudas Lilladher's research report on Voltamp Transformers

Voltamp Transformers (VAMP) reported robust quarterly performance with 32.9% YoY revenue growth and EBITDA margin expansion of 281bps YoY to 17.7%. Demand momentum is expected to sustain, driven by continued focus on infrastructure capex in the budget, with particular emphasis on energy security and transition to renewable energy. The enquiry pipeline remains healthy across sectors such as Data Centers, Metals & Steel, Cement, Commercial Real Estate, Green Energy, and Oil & Gas. The company has announced 6,000 MVA capacity expansion in power transformers to cater to growing transformer demand over the next 5-6 years, reinforcing the robust long-term outlook. However, rising industrial metal prices, supply chain constraints in CRGO material, and growing competitive intensity may impact margins in the near-to-medium term. We remain positive on VAMP considering its 1) strong market position in industrial transformers, 2) healthy demand momentum, 3) debt-free balance sheet, 4) consistent free cash flow generation, and 5) growing high-margin service business. he stock is currently trading at a P/E of 44.8x/38.0x FY25/26E. We value the stock at a P/E of 40x FY26E (30x FY26E earlier) on account of a robust long-term demand outlook and improving profitability. Upgrade to ‘Accumulate’.

Outlook

We revise our FY25/26E EPS estimates by +9.2%/+11.5% factoring in strong volume growth & better margin profile and upgrade the rating to ‘Accumulate’ from Hold with a revised TP of Rs 14,922 (Rs10,018 earlier).

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