Voltamp Transformers Q1 Results Review - Robust Quarter; Outlook Remains Sanguine: Yes Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Yes Securities Report.Our view Voltamp Transformers Ltd. reported another strong print during Q1 FY24 driven by volume-led revenue growth (+19% YoY). The company reported a decadal high Q1 Ebitda margin aided by easing of commodity cost pressures amid a strong demand environment. An order book of ~Rs 11.9 billion (executable in the current year) and full ramp-up of Savli operations back to normal, augurs well for the company’s near term revenue and margin performance. Looking forward Voltamp Transformers' management remains optimistic on the business outlook aided by steady growth in domestic demand from metals, data centres, green energy, pharma, automobiles, etc. Though order booking momentum is expected to sustain, competitive intensity especially in lower voltage class transformers has increased which leaves little room for margin expansion. We are building in a 22% earnings per share compound annual growth rate over FY23-25E mainly driven by revenue growth while margin is expected to remain flat in the near term. The stock is currently trading at valuations of 16.3 times/13.0 times FY24E/25E and excluding other income it trades at price/earnings of 20.9 times/16.5 times FY24E/25E EPS. We maintain our 'Buy' rating with a revised target price of Rs 5,836. Result Highlights Sales grew by 19% YoY to ~Rs 3.2 billion (our estimate: Rs 3.3 billion) on the back of 15% YoY volume growth at 2,751 megavolt ampere.Gross margins expanded by ~270 bps YoY at 26.9% led by softening of commodity prices.Ebitda came in at Rs 480 million (up ~32% YoY) (our estimate: Rs 556 million) with Ebitda margins coming in at 14.9%, a ~150 bps YoY expansion. Other expenses grew by 42% YoY.Profit before tax grew by 105% YoY to Rs 685 million driven by higher other income which came in at Rs 108 million versus a negative Rs four million in Q1 FY23.As a consequence, profit after tax grew by 90% YoY to Rs 508 million (our estimate: Rs 497 million).Click on the attachment to read the full report:.GE T&D India Q1 Results Review - Healthy All-Round Beat; Demanding Valuations: Yes Securities.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Voltamp Transformers Q1 Results Review - Robust Quarter; Outlook Remains Sanguine: Yes Securities

Management remains optimistic on the business outlook aided by steady growth in domestic demand.

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