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Voltamp Transformers Annual Report 2023 Summary

Updated: Oct 7, 2023

1. Voltamp Transformers Limited was established in 1963. Subsequently, it was converted into a Public Company, in the year 2006. It has its registered office in Vadodara, and the manufacturing plants are located at Makarpura, Vadodara and at Savli, District Vadodara. The Company has installed facility to manufacture oil filled power and distribution transformers up to 160 MVA, 220 KV class, Resin impregnated Dry type Transformers up to 5 MVA, 11 KV class (In Technical collaboration with MORA, GERMANY) and Cast Resin Dry type Transformers up to 12.5 MVA, 33 KV class (In Technical collaboration with HTT, GERMANY).

2. VOLTAMP delivers its strength from its customers. Over the years of sincere service and dedication to its customers has earned the company, distinguished customers which includes leaders in Government and Semi-Government projects, Refineries, Fertilizer Plants, Power sector, Pharma, Paper, Steel, Cement sectors etc. and various other Industries and State Electricity Boards in India as well as abroad also.

The Company has posted highest ever sales and service revenue of Rs. 1385.10 Crores as compared to Previous year Rs. 1127.20 Crores. Sales Volume increased to 11883 MVA as compared to 11137 MVA. PBT Increased to RS. 260.36 Crores compared to Rs. 173.20 Crores.

3. The FY 2022-23 commenced with unprecedented volatility in commodity prices owing to Russia Ukraine conflict, ended with weal global outlook, characterized by a fear of recession, high inflation and high interest rates. Fortunately in second half the situation eased. The management team tool necessary proactive measures to mitigate and deliver targeted volume production.

4. The policy decision taken at the beginning of the year to focus on short cycle order business helped to deliver robust performance during FY:2022-23 with the highest ever sales and service revenue and also operating profit, with timely payment realisation, despite some production loss due to delay in concluding wage revision agreement with Savli based contract workmen.

5. Wage revision settlement with contract workmen at Savli factories prolonged and got amicably concluded during March 23 without altering business model of the Company. With that capacity utilisation remain suboptimal for 2 months period in Q3 and the management remain cautious for booking new orders during the period October 2022 to January 2023 resulting in lower order opening volume as on 01st April, 2023 for Savli factories. This will impact partially first quarter revenue in FY:23- 24. However order booking resumed from March 2023 with full speed and Savli factories operations are back to normal.

6. Results for the FY:2022-23 are exceptionally better than budgeted numbers, in view of higher volume dispatches, saving in material cost with softening of commodity prices and also liquidation of critical raw material i.e. CRGO lamination (imported), kept as buffer stock post Russia-Ukraine crisis to meet emergency need.

7. The financial year 2023-2024 started with an order backlog of Rs. 602.66 crores (5859 MVA). During the period October 2022 to February 2023, the Company remain cautious in booking new orders for Savli factories in view of delay in concluding wage revision agreement with workman employed through contractors. This will partly impact sales revenue in first Quarter of FY:2023-24.

8. During the FY:22-23 Corporate India has remained relatively resilient despite the slowdown in the global economy and uncertainties in the financial system. Going forward, business outlook looks stable, aided by steady growth in domestic demand, deleveraged balance sheets, easing of commodity cost pressures and the Government’s thrust on infrastructure spending. However key monitorable is the prolonged slowdown in global demand, unexpected spill overs from the RussiaUkraine war and emerging uncertainties in the global financial system. The order booking tempo is expected to continue except inflationary pressures leading to steep interest rate hike, forcing corporates to defer CAPEX.

9. The Company at present is witnessing good enquiry pipeline in its market segment. However with hardening interest rate and demand slowdown in advanced economies, planned CAPEX of Corporate catering Export market do run the risk of slow down/deferment in few sectors like chemicals and textiles.

10. Currently the geo-political situation, volatile commodity prices be crucial parameter to watch while forecasting upcoming businesses opportunities. Volatility in major material prices is also an area of concern adversely impacting fixed price orders for transformers. The wide fluctuation of rupee against US Dollars also affects margin since the key raw materials, viz. copper, transformer oil, special steels for lamination, etc., are of import origin.

11. The Company is debt free since many years and having a good amount of investments of its surplus funds in diversified portfolios, viz. debt and equity mutual funds, Government Securities, bonds, debentures, fixed deposits, tax-free bonds, etc. and the Company has efficient working capital management.

12. The Company has a diverse industrial client base and not dependent on any particular industry segment or region to book orders. Continuity of senior level management staff in service with long duration allows the Company to handle larger volume of business with comparatively less risk.



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