Voltamp Transformers may move to Rs 1100: Prakash Diwan

Prakash Diwan of prakashdiwan.in told CNBC-TV18, "Voltamp Transformers - the sales numbers if we see the topline growth, it is understandable from Rs 517 crore to Rs 565 crore is not a great thing to talk about. However, the industry is going through, last year was really tough for most people because of the peak of the slow down. Now even in this market environment these guys have clocked profits which are so nice. The reason is the operating leverage; it is probably one of the only companies in this segment which is completely debt free. He further added, "It is on a Rs 470 crore free cash reserve and they have been talking about acquisition of downstream companies as well as upstream companies. So, that could help them scale up and compete with the likes of Crompton Greaves, Siemens at some stage when it comes to bidding for new distribution projects that Power Grid is already looking at.""I have seen this company from close quarter. It is headquartered out of Baroda, they have the unit there. It has got working capital management which is commendable. In fact they actually sell only if they are assured of payment within 45 days in a capital good cycle that is kind of unbelievable. "The best part is the management has not diluted equity since the IPO; it stands at about Rs 10 crore odd, it has been around for a long time, no dilution, no propensity to do adventurous diversification. It is a great pedigree and Rs 600 plus was its 52-week low and at the current levels it is really not very far of. I would give it about Rs 1,100 as the next milestone to look at. It could happen in six months, it could happen in nine months but that is where you would have to re-evaluate the stock. However, re-set it for that target of Rs 1,100 and it should be able to reward you," he said.