Voltamp Transformers Price Target Set at Rs 10,503 by Prabhudas Lilladher
Voltamp Transformers' Soft Quarter Performance Raises Concerns
Voltamp Transformers (VAMP) has reported a decline in revenue of 1.2% year-over-year (YoY) and a contraction of 377 basis points (bps) in EBITDA margin due to the sharp escalation in transformer oil prices and currency fluctuations that led to an increase in raw material prices. Despite this, the company's year-to-date (YTD) order book remains healthy at INR15.1 billion, including a significant inflow of INR3.1 billion in April 2026. However, approximately INR7.5 billion of this order book comprises legacy fixed-price orders booked prior to the sharp rise in raw material prices, which is expected to exert near-term margin pressure.
Key Factors to Monitor
The company's new plant, expected to be operational by July 2026, is expected to support volume growth by catering to additional demand from data centers, EPC (excluding utilities), GETCO, and private players. Additionally, the company has acquired land for a new facility at an estimated cost of approximately INR250 million, reflecting its preparedness for future expansion opportunities. However, near-term pricing pressure, legacy order backlog execution, and supply-chain bottlenecks remain key monitorables, despite the demand outlook continuing to remain healthy.
Revised Estimates and Rating
We have revised our earnings per share (EPS) estimates for fiscal year 2027-28 by -10.1% and -3.9%, respectively, and have downgraded our rating from 'BUY' to 'Accumulate' due to the margin pressures from legacy orders and supply-chain constraints. We have also rolled forward to March 2028 estimates, valuing the stock at a price-to-earnings (P/E) ratio of 26x, which is down from 26x September 2027 estimates. Our revised target price is INR10,503, down from INR10,312.
| Fiscal Year | Original EPS Estimate | Revised EPS Estimate | Original P/E Ratio | Revised P/E Ratio | Original Target Price | Revised Target Price |
|---|---|---|---|---|---|---|
| 2027-28 | - | -10.1% | - | - | - | -3.9% |
| 26x Sep'27E | 26x Mar'28E | INR10,312 | INR10,503 |
Investor Takeaway
Investors should be cautious of near-term margin pressure due to sharp rise in raw material prices.
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