Buy Voltamp Transformers; target of Rs 11,350: Emkay Global Financial

Emkay Global Financial's research report on Voltamp Transformers

VAMP’s Q4FY25 results were ahead of estimates due to higher than estimated volume and realization. The higher volume (+9.4% YoY) included a spillover from last year. Revenue/EBITDA/PAT was up 24/16/4% YoY at Rs6.2bn/1.2bn/968mn. EBITDA margin declined by 135bps YoY to 18.6% as gross margin fell by 300bps/230bps YoY/QoQ to 27%. 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 (Rs9.8bn, +26% YoY), coupled with the enquiry base, robust balance sheet, and improved cyclical demand tailwinds, grants us a more constructive outlook on the stock.

Outlook

We maintain BUY on Voltamp Transformers (VAMP) while cutting our TP by ~15% to Rs11,350 (upside: 39%) from Rs13,350 earlier.