Key Data

CMP Rs 1160.23

Sector Transformer

Face Value Rs.10

BSE Code 532957

52 Week H/L Rs 1940/ 605

Market Cap Rs 1174 Cr

Investment Rationale

Voltamp Transformers Ltd (VTL), is a Vadodara based company established in 1963 by Mr.Lalitkumar H. Patel (Chairman). VTL is a leading company of India who design & manufacture a complete range of Transformers. VTL operates mainly into three segments: Oil filled Power Transformers up to 50MVA, 132KV ratings, Oil filled Distribution Transformers up to 5MVA, 33KV range and Dry Type Transformers (Vacuum resin impregnated type and Cast resin type). The power and distribution transformers combined constituted 73% of revenues while dry type transformers constituted for the remaining 27% of revenues during F07.

Voltamp virtually a debt free company, with a small debt of Rs 0.89 crs. Current debt equity ratio of the company is 0.01:1.

Recently, the company has enhanced their installed capacity from 7200MVA to ~9000MVA with capex of Rs 15crs (which was sourced from internal accruals). The commercial production of expanded capacity has started in December 2007.

Voltamp has a different business model to the industry. The company earns ~95% of the revenues from EPC contractors & industrial consumers and rest from SEB’s. The company derives as high as 65% (FY07) of its revenues from industries while 30% comes from EPC contractors like L&T, ABB, and Siemens. While, the industry earns ~80% to 85% revenues from SEB’s and rest from industries.

Over the past few years, the company has done sales in the range of 2-4x its opening order backlog. As on Jan 08 the order backlog stood ~Rs 400crs providing great visibility for the ongoing year.

Voltamp has diverse product profile manufacturing oil and dry type transformers. The company enjoys the market leader position in dry type transformers with ~40% market share.

VTL net profit rose 118.10% to Rs 22.73 crore in the Q3FY08 as against Rs 10.42 crore during Q3FY07. While, sales of the company rose 25.40% to Rs 169.38 crore in Q3FY08 as against Rs 135.03 crore during Q3FY07.