I see there is a shortage of CRGO the main rawmaterial for Transformer… any update when imports are getting restored…?
Agreed but I doubt that they will be able to repeat even 93 crores in Q1 due to strike which lasted more than a month, it might hamper Q2 revenues as well. But on full year basis I am expecting revenue of 800 crores on conservative basis with margin above 15% due to operating leverage (700 crores of orderbook to be executed by FY25 + 100 crores of new orders to be executed this year itself). The company has capacity of 10000MVA and assuming realisation at 10 Lakh/MVA it has revenue potential of 1000 crores at full utilisation, which also can not be ruled out given the unprecedented demand environment.
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chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.bseindia.com/xml-data/corpfiling/AttachLive/1a703611-41b0-4d78-b6a1-2a6144e89f43.pdf
Due to ~1 month worker’s strike in the factory Indo Tech’s 1QFY25 revenues at Rs 82.2 crs declined 12% YoY (worker’s strike from April 29 to May 24, 2024)
However despite this EBITDA at Rs 8.2 crs was up 35% YoY (Clearly orders in the backlog are higher margin orders)
EBITDA margins at 10% increased to 1QFY25 from 6.5% in 1QFY24
PAT at Rs 5.9 crs was up 67% YoY.
Does not make sense to do QoQ comparisons. Usually 1Q is the smallest quarter in the year and 4Q is the largest (for example 1QFY24 was only 18% of FY24 revenues and 1QFY23 was only 15% of FY23 revenues)
Overall a decent quarter. 2Q, 3Q and 4Q will be even better.
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Was 1 month strike priced in? Seeing 2 successive lower circuits when rest of the market is green.
What kind of short term and long term impact will this strike cause? Mr market don’t like such instability. Will it give PR re rating?
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Dont know what the market was factoring.
Please note ICRA credit rating note was released on July 10, 2024 well post 1QFY25 when the 1 month strike happened. So the Rs 700 crs revenue and 14% EBITDA margins expectations for FY25 factor in the 1 month strike impact.
It is also possible people who got in at very low levels are booking profits. Stock is anyway illiquid and moves in upper and lower circuits.
Disclosure: Invested and buying more.
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The strike happened long back so it has nothing to do with the price right now it’s mostly profit booking and new entrants selling who might not be aware of the strike/seasonality of the business so a drop in sales looks negative to them and yeah also can be operator games.
The performance as per my analysis has been very good, Technically the topline should have been around 120-125 Crores which would be a 30-35% kinda YoY growth in the topline and the bottom line should have seen a 140-150% growth keeping in mind operating leverage and margin expansion.
The prices are volatile due to the relatively low 15k shareholders, 75% promoter holding, and lack of popularity of the company, So I am not letting this quarter decide the company’s fate.
Disclosure - Invested
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Agree on popularity part. TRIL on other hand has handsome PE re-rating and flying high.
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Some FII buying seen in the June Quarter, Unable to know the institution involved. Maybe due to the holding being less than 1%.
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So the visibility of revenue of 800 crores plus revenue seems to be more realistic now with new order of 42 crores to be executed by May’25.
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I wish there were more disclosures from the company, call or a presentation. Feels like one is flying the dark even though the story is very good.
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Is transformer sector losing its charm?
All players in transformer and power distribution sector are technically they are weak because stocks are trading below 50DMA. Any thoughts on this from anyone closely tracking this sector?
One reason could be that there was an issue of importing electrical steel… i.e. CRGO coils the main component in transformers… so margin can hit but as per concall of Apar industries 2-3 quarters back the Transformar companies are booked for next 3 years
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If anyone attended the AGM then kindly post key takeaways.
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This looks achievable. Available at FY25 EV/EBITDA of 15x vs TRIL at 40x.
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Is shilchar is also avlbl at similar FY25 valuations as indotech? It seems a better bet looking just at the financials and management pedigree.
