Buy Voltamp Transformers; target of Rs 10,285: Prabhudas Lilladher

Prabhudas Lilladher's research report on Voltamp Transformers

Voltamp Transformers (VAMP) reported a revenue decline of 1.1% YoY due to deferment of Rs470mn in revenue with EBITDA margin contracting by 55bps YoY to 17.1%. Strong demand momentum continues, backed by sustained public and private sector capex across key industries. The company is witnessing strong order inquiries from high-growth segments such as data centers, steel, cement, oil & gas, and green energy. To capitalize on this, the company’s 6,000 MVA capacity expansion remains on track and is expected to be fully operational by Q1FY27. This positions Voltamp well to serve the growing demand for power transformers, particularly in the class of up to 220kV, which constitutes 80–85% of total power transformer demand.

Outlook

However, rising competitive intensity and increased capacity additions are expected to lead to margin normalization going forward. We maintain ‘Buy’ rating and value the stock at a PE of 28x FY27E (same as earlier) with a TP of Rs10,285 (same as earlier).

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