Buy Voltamp Transformers Ltd For Target Rs. 10,800 By Geojit Financial Services Ltd
Fundamental View
Voltamp Transformers Ltd. is a leading manufacturer of power and distribution transformers in India, catering to sectors like renewable energy, oil & gas, cement, and data centers.
* In Q2FY26, Voltamp Transformers delivered strong results, with revenue up 21.3% YoY to Rs.482.6cr on the back of robust execution and sustained demand from the power, renewable, and industrial segments. EBITDA rose 24.8% YoY to Rs.93.6cr, with operating margins improving to 19.4% from 17.15% in Q1FY26. Net profit stood at Rs.78.9cr, a moderate 4.2% increase YoY, supported by stronger revenues and better operating efficiency.
* Voltamp’s financial position remains strong, supported by a robust order pipeline. The company began FY26 with ?938cr in orders and secured an additional Rs.1,377cr during the year, along with Rs.92cr waiting confirmation, providing solid revenue visibility for the upcoming quarters.
* Voltamp anticipates sustained demand supported by grid modernization, renewable energy integration, and rising industrial capex. The company is also investing Rs.200cr in a new greenfield EHV transformer plant at Jarod, which will add 6,000 MVA of capacity by June 2026.
* As per Bloomberg consensus, Voltamp trades at a forward P/E of 22x, a moderate valuation for Indian mid-cap industrials and relatively attractive compared to the broader capital goods sector. With strong fundamentals, including a strong ROE and consistent profitability, the stock appears reasonably priced and even slightly undervalued given its growth prospects and sector positioning.
Technical View
* The stock is witnessing strong bullish momentum, gaining over 15% and is currently on the verge of a downward-sloping trendline breakout, signaling a potential trend reversal.
* It trades above the 50- and 200-DMA, reinforcing a positive trend bias, with rising volumes indicating renewed interest.
* The RSI has broken above its trendline resistance and is trending higher, indicating improving momentum and increasing buying strength. Additionally, a positive MACD crossover further supports the bullish setup, suggesting that the stock is likely to extend its upward move in the coming sessions, backed by strong volume confirmation.
* A decisive move above Rs.8,200 on strong volumes could trigger an uptrend toward Rs.10,800, while Rs.6,900 remains a key support level.
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SEBI Registration Number: INH200000345
