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Voltamp Transformers – Electrifying Profits

May 12, 2008

Voltamp Transformers 4Q08 net sales grew 10% yoy to Rs1.35bn, 18.3% lower than our estimates. For the year, they rose 36.9% yoy, to Rs5.55bn, 5.2% lower than estimated. Expect the company to clock sales of Rs8bn and Rs10.7bn for FY09 and FY10, at a 39% CAGR. The value of confirmed orders on hand for FY09 is Rs4.5bn. Capex (relocation to Vadodara) planned for FY09 is Rs350m. The expected transformer manufacturing capacity by FY10, postexpansion, is 13,000 MVA.

For the year, PAT more than doubled, to Rs799m (shooting up 102.3% yoy, at just 1.3% over our Rs789m estimate). The exponential growth was fuelled by significant savings in material costs, which nosedived 580bp yoy. For 4Q08, the company reported PAT of Rs217m, up 59.7% yoy (5% above our expectations). Revised PAT estimates for FY09 and FY10 stand at Rs1bn and Rs1.4bn, a 30.4% CAGR.

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