Multibagger stock to buy: Prabhudas Lilladher expects 25% upside after Q4 results 2025
Multibagger stock to buy: Brokerage firm Prabhudas Lilladher has given 'buy' rating to multibagger smallcap stock Voltamp Transformers. The brokerage firm has given the target price of Rs10,285, sees an upside potential up to 25 per cent after the company reported healthy Q4 results for 2025.
'We remain positive on VAMP considering its 1) strong market position in industrial transformers, 2) healthy demand momentum, 3) debt-free balance sheet, 4) consistent free cash flow generation, and 5) growing high-margin services business. The stock is trading at a P/E of 25.2x/22.3x FY26/27E. We maintain 'Buy' rating and roll forward to Mar'27E valuing the stock at a PE of 28x FY27E (33x Sep'26E earlier) with a revised TP of Rs10,285 (Rs11,437 earlier),' the brokerage firm said in a note.
The brokerage firm has also revised its FY25/26E EPS estimates of Voltamp Transformers by -2.5%/-3.6%, factoring in expected margin normalization driven by a moderation in realizations against high base.
'The company's outlook remains positive, supported by strong demand from sectors such as data centers, steel, cement, and green energy, while commercial and industrial projects are expected to boost demand for IDT transformers. However, margins are expected to normalize going ahead due to a high base and rising competition,' it added.
For the financial year ending March 31, 2025, the company recorded a 24% rise in net sales and services income, reaching ₹ 624.81 crores compared to ₹ 504.16 crores the previous year.
Total income increased by 22% to ₹ 641.82 crores, while net profit before tax climbed to ₹ 129.34 crores from ₹ 119.38 crores.
Operating profit rose 18% year-on-year to ₹ 114.01 crores, up from ₹ 96.99 crores.
Despite these gains, the EBITDA margin dipped slightly to 18.63% from 19.92%, mainly due to a 27% decline in other income and a 32% drop in investment income.
Voltamp Transformers also declared a record-breaking dividend of ₹ 100 per share (equivalent to 1000% of the ₹ 10 face value), marking the highest payout in the company's history. This results in a total distribution of ₹ 101.17 crore, which represents 43% of its net profit after accounting for capital expenditures and book profits.
'Reflecting on the Company's stellar performance, the Board of Directors proposed payment of dividend @ 1000% i.e. Rs.100 per equity share on face value of Rs.10 per share, the ever highest in its history entailing total payout of Rs.101.17 crores, representing 43% payout of after tax profit, adjusted for CAPEX and marked to market gain (being book entry),' the company said in the filing.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
First Published: 6 May 2025, 01:27 PM IST
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