Nuvama Institutional Equities has initiated coverage on Voltamp Transformers with a buy rating and a target price of ₹10,200 per share, calling the company one of the “gold-standard” transformer makers in India with deep presence across T&D, renewables, industrials and emerging sectors such as data centres, EV infrastructure and semiconductors. The brokerage said Voltamp is well positioned to capitalise on the ongoing power sector capex cycle and the broader industrial revival, supported by its disciplined execution model and strong balance sheet.
Nuvama noted that after relatively muted growth in FY25–26E, Voltamp’s earnings growth is set to reaccelerate as capacity expands from 14,000MVA to 20,000MVA by FY27. The new Jarod facility in Vadodara, funded entirely through internal accruals, is expected to reach 60% utilisation by FY27 and scale to full capacity thereafter. This expansion, alongside steady demand across core customers, is likely to drive 18% revenue growth and a 13–15% EPS expansion in FY27, even as margins normalise from peak levels.
Voltamp’s business model — focused on the sub-220kV segment and shorter execution cycles — allows it to avoid large, tender-driven projects and instead prioritise orders with favourable working capital terms. This strategy has historically supported best-in-class operating margins of 17–18%, RoE of 18–20% and consistently strong cash-flow conversion. Its premium realisation of around ₹1.3 million per MVA reflects strong brand credibility, though Nuvama noted a narrowing of premiums as peers attempt to catch up.
Despite this, the brokerage said Voltamp remains attractively valued at 20x FY28E earnings compared to peers trading at 30–40x. With expected revenue and PAT CAGR of 17% and 13% over FY26–28E, and robust RoE around 19%, Nuvama believes the stock offers an appealing risk-reward profile within the private-capex-linked universe.
Disclaimer: The views and recommendations above are those of Nuvama. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
