- Voltamp reported weak set of numbers as production was impacted by GST related uncertainty. This saw the clients delaying giving manufacturing clearance to the company. Even major demand drivers like Solar power witnessed slowdown due to increase in tax incidence under GST. The business outlook shared by the management was also weak. We have therefore reduced our earnings projections.
- Yet, we believe, valuations are not costly for the company given excellent management pedigree and strong balance sheet. Hence, maintain BUY with revised target price of Rs 1248 (Rs 1452 earlier), which values the stock at ~ 15x FY19 earnings. Voltamp stands out among the small-cap transformer companies in terms of quality of management and strength of balance sheet (zero debt and cash & liquid investments of ~ Rs 3.1 bn)