Voltamp Transformers has carved a special niche for itself in the transformers’ space because of the experience of over four decades in the industry.
The company’s business spans across three strategic business units: power, distribution and dry type transformers. Because of its experience, it has outperformed its competitors in customizing application transformers, which find their uses in various industries, construction space and power zones.
Voltamp Transformer currently operates at 9000 mega volt ampere, it is relocating its manufacturing facility for oil-filled distribution transformers and dry type transformers. This will take up manufacturing levels from the current levels of 9000 MVA to 13000 MVA in FY10E. This capacity build up is owing to surge in demand. The order book position is very strong and pegs at Rs 450 crore.
Voltamp Transformer has state-of-the-art test facilities fully equipped and backed by German know-how. This advance use of technology has reduced process time and optimized cost structure. The casting plant uses the latest static mixture technology, which is fully computer based and controlled. Transformers are produced under specific testing conditions, which reach customers defect free, says ULJK.
The company caters to varied industrial clients, the major ones being ABB, Siemens, L&T, etc. The demand for its products mainly arises from various industries such as steel, power, cement, automobile, refineries, engineering, etc. where capital expenditure increases at a furious pace. Real estate demand arising out of retail, residential complexes, offices, hospitality, SEZs, etc., provide further impetus to the demand. Also, the brokerage sees replacement demand in the offing along with fresh demand.
Voltamp Transformer enjoys a good grab in dry type transformers segment, with a market share dominance of 40 per cent. This segment has high margins compared to the power and distribution transformers segment. Foreign technical collaborations gave dry transformers impregnable 42 per cent revenue in 2007-08, which is expected to rise further in coming years, says ULJK.
ULJK expects Voltamp Transformer to grow at a CAGR of 30 per cent in FY10E. At the market price of Rs 764, the stock trades at 7.4x and 6.1x its EPS earnings of FY09E and FY10E respectively.
PE Value : 6 (Undervalued as compared to peers [Industry PE: 23] and expected to move much higher quickly).
Share holding Patten (Promoters hold 51%, FIIs hold 13% and other institutions hold 10%)
| Share holding pattern as on : | 30/06/2009 | 31/03/2009 | 31/12/2008 | |||
|---|---|---|---|---|---|---|
| Face value | 10.00 | 10.00 | 10.00 | |||
| No. Of Shares | % Holding | No. Of Shares | % Holding | No. Of Shares | % Holding | |
|---|---|---|---|---|---|---|
| Promoter's holding | ||||||
| Indian Promoters | 5123280 | 50.64 | 5233280 | 51.73 | 5233280 | 51.73 |
| Sub total | 5123280 | 50.64 | 5233280 | 51.73 | 5233280 | 51.73 |
| Non promoter's holding | ||||||
| Institutional investors | ||||||
| Banks Fin. Inst. and Insurance | 1360 | 0.01 | 760 | 0.01 | 830 | 0.01 |
| FII's | 1313846 | 12.99 | 1182588 | 11.69 | 1202340 | 11.88 |
| Sub total | 2702911 | 26.72 | 2619198 | 25.89 | 2710357 | 26.79 |
| Other investors | ||||||
| Private Corporate Bodies | 994232 | 9.83 | 1023798 | 10.12 | 889659 | 8.79 |
| NRI's/OCB's/Foreign Others | 48522 | 0.48 | 35825 | 0.35 | 34985 | 0.35 |
| Others | 116041 | 1.15 | 63612 | 0.63 | 43962 | 0.43 |
| Sub total | 1158795 | 11.45 | 1123235 | 11.10 | 968606 | 9.57 |
| General public | 1132134 | 11.19 | 1141407 | 11.28 | 1204877 | 11.91 |
| Grand total | 10117120 | 100.00 | 10117120 | 100.00 | 10117120 | 100.00 |
MFs invested in this company
| Scheme | % of asset size |
|---|---|
| Escorts Power and Energy Fund - Growth | 9.50 |
| Escorts Power and Energy Fund - Dividend | 9.50 |
| Escorts Growth Plan - Growth | 4.54 |
| Escorts Growth Plan - Dividend | 4.54 |
| Principal PNB Long Term Equity Fund 3 Year Plan Series 1 - Growth | 2.95 |
Overall STRONG BUY for long term holders.
