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Yes Securities Report
Voltamp Transformers Ltd. reported a strong set of numbers despite a month‐long workers' strike at its Savli facilities. Revenue growth was led by a mix of volume/realisation growth of 10%/5% YoY respectively.
Healthy operating margins aided by gross margin expansion and operating leverage benefits led to a ~450 bps YoY operating margin expansion. Order book remains strong at ~Rs 9 billion (0.7 times trailing twelve months revenue) as on Q3 FY23, providing revenue visibility for the next few quarters.
In the medium term, Voltamp sees private investments taking place in sectors such as clean energy, cement, steel, chemicals, pharmaceuticals, auto, semiconductors, electronics, textile, healthcare, data centres, logistics, industrial parks and oil refining, etc.
We believe the company is one of the best plays forfuture upturn in industrial demand given its industrial focused business model. We remain positive on Voltamp considering its strong business model,debt free balance sheet and consistent free cash flow generation (current cash plus investment ~Rs 6.4 billion).
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