Anand Rathi 's research report on Voltamp Transformers
Despite the lockdown during the quarter, Voltamp reported a steady operating performance. PAT, though, was hit by negative other income on account of marked-to-market losses on investments. Order inflows, too, were severely impacted. Yet, the strong EBITDA margin, its net-cash status and FCFs were positives. Given the present uncertain situation, we are cautious regarding order inflows and execution in the near term. However, long-term, we are positive on the company due to its industry-focus, debt-free status and consistent free-cash-flow generation (current cash and investments of `4.5bn, 45% of market cap).
Outlook
We maintain our Buy recommendation, with a lower target of `1,241 (13x FY22e P/E), earlier `1,297. Recovery in industrial activity is the key monitorable.
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