Voltamp Transformers: Improving utilisations to drive growth in low voltage segment

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26 Aug, 2025 12:21

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Jitendra Kumar GuptaMoneycontrol Research

Voltamp Transformers, which is a debt-free company sitting on cash equivalent of close to Rs 300 crore or about 30 percent of its market capitalisation, continues to deliver on expectations.

Quarter at a glance

The company has a higher market share in the sub-220 kv transformers and is benefitting from a higher demand led by applications like solar power generation, etc.

During the quarter ended June 2017 the company reported 13 percent increase in sales. Moreover with the improving capacity utilisations and control over costs, the company was able to record a decent 34 percent growth in operating profits at Rs 21 crore and 31 percent growth in net profits.

Outlook

Growth is expected to continue particularly in the low voltage segment with improving utilisations. The company could possibly re-deploy a part of the cash for expanding capacity from FY19 onwards. Land for this purpose has already been acquired. In FY18, the company is expected to report an EPS of close to Rs 80 a share. At the current price, the stock is trading at less than 14 times its FY18 projected earnings which is reasonable considering the balance sheet strength, growth in the industry and return ratios.