Indotech - A turnaround story?

Stock Opportunities Untested - but worth a good look
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Change of CEO as updated by the company earlier.

I think he might be a great replacement.

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There is something fishy in the resignation of Mr Gokhale, CEO. Generally when top executives resign, they give sometime for the transition. But here he was released on the same date. It is very unusual. Is it the reason for lower circuit today?
Informed boarders may throw light on it.
Invested. Considering to add but now not so sure.

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Sorry, but seems like you aren’t following the company well or reading relevant updates from the company. I have shared 2 documents one of which is dated February 11 which was almost 2 months before his resignation and clearly has the date of resignation mentioned. Kindly take your time and research prior to making such statements.

From the same Filing -

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Results are quite disappointing, any views ? Lack of Con-calls make it worse.

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Though results may be not as per investors expectations but notably F Y 2025 has been the year of highest Sales and PAT and cash from operations since inception of company,with almost a zero debt on its balance sheet and cash reserves of 93 crores the company looks fairly valued after correcting more than 40 % from its peak.Also the parent company SSEL’s support will ensure a decent order book .Disc- I am currently Invested and may be biased.

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Hi Mohit,
Can you pls share your views why did you mention results are disappointing. I saw that the Operating Profits and Sales both have been increasing. ROCE 31. Pls share

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  • Operating Profit (EBIT): ₹19.53 crore, down 24.18% year-on-year.
  • Despite the revenue growth, profitability declined due to increased operating expenses and higher depreciation costs.
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Though the Sales has incresed but the OPM% has redued and hope that this should be one of. The managemnt should do a concall in the interest of investor’s trust on the company.

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Given current tailwinds in transformer sector and bumper results in peer transformers companies, investing in indo tech does not make any sense.

When the sector is doing so good and only you are the one which has not performed in terms of both QoQ and YoY Sales growth and margin, so from now on it is only a hope buy that it will improve rather than accepting the reality that it is not a good managed transformer company.

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76

I reached out to the company and happened to speak to someone from the management. I have put forth some of the FAQs and am currently awaiting the answers. Will keep you all posted.

Edit - Also, the management is already in talks about doing Con-Calls.

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I had also mailed the company a few days back but haven’t received any response.

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LC since last week, is there anything else going on like Gensol!

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Reply from Indotech -

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Pledged percentage is showing 77.8%. what was the purpose any one know?

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Microsoft Word - Reg30_FreshDisclosure_02072025

Any idea what is this injunction suit regarding - apparently there is some disturbance.

Disc - Invested

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with reference to point (d) of the table, not much has been disclosed imo it has something to do with trade unions. Perhaps they have initiated injunction suit to stop trade union’s actions from affecting productivity and efficiency. Not sure tho.

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Farmers in Kandukur intensify protest against Andhra Pradesh government’s plan to acquire 8,300 acres for solar project - The Hindu this one is related to the same group.

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How is Indo solar challenge related to indotech transformer? They are sister firms so will the challenges faced by Indo solar impact indotech?

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I don’t think it will have any impact as they are separate. Also in this matter land allocation was done by AP gov and it is not Shirdi Sai electricals fault. I am still bullish on Indotech as it is a proxy to its parent company.

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86

Interesting AGM 2025; The company estimates demand to sustain for next 7-8 years and operations to reach new heights post capex. Key highlights from the AGM:

Operational Highlights:

  • Timely execution and improved product mix helped the business grow during the financial year. * Renewable segment has been growing fast at 20%+ CAGR

  • Factory expenses as part of other expenses- Cost of testing, short circuit charges, security expenses, Admin expenses and the license fees.

  • Increase in inventory and debtor- Primarily done at the year end, secured debtors in terms of LC. Inventory increased to cater to current year’s demand.

  • Union Issue:- Three unions in factory- three disciplinary orders- injunction order is enforced, The issue is settled now and operations resume as normal.

  • Variable: Fixed contracts ratio - 75:25 percent for FY26 (This is what hurt them a bit in FY25)

  • Order Book: Power and Distribution split at 80:20. Total order book at 850 Crores- mostly to be executed in this financial year. The company is now booking orders for FY27, large transformers above 20 KV range. (Have received more orders since this update)

  • Demand led by Data Centers, BESS projects: Demand looks solid for next 7-8 years.

  • On Domestic vs Exports: Not focused on exports, largely domestic. 1.8 Crores exports only in FY25.

  • Synergy with SSE- Two factories- Kadappa and Allahabad. Continue to utilize strength of Sri Shirdi Sai - Synergies and benefits such as joint procurement, shared lead generation and supply chain efficiencies. Raw material is procured at economically good rates.

  • Can reach 1000 Crores+ revenue by FY27; Renew, Adani and JSW- renewed orders from them. NTPC we supply regularly other than L&T, Siemens etc.,

  • On Competitors: CG Power, Voltamp, Hitachi, Atlanta and Technical Associates- main competitors.

  • Also manufacture Solar IDT transformers- One of the major power transformers for solar power plants. These days solar power plant capacities have gone to 300 MW and will move to GW range. The solar power generally is generated at 690V- 33 KV- 220 KV and then to 400 KV.

  • 50-60% of total capacity goes to renewables of which 50% of the total transformers go to Solar and Wind.

  • Product Range up to 220 KV, Transformers up to 250 MVA.

  • On Joint Venture: We’re in discussion with multiple global leaders in the market. Few parties have come for discussion- Will take a bit time to shortlist may take 3-6 months. By the end of FY, will have the partner shortlisted to increase the product portfolio.

  • On Pledging: In next 4-6 months will be cleared

Capacity Expansion:

  • Continuous expansion enables us to participate in larger and more complex bids in high growth areas of power generation and renewables.

  • Manufacturing Distribution and large Power Transformers and renewable skid mounted substations.

  • Planned capex of 75 Crores in next 2 financial years - Mostly through internal accruals. Already started investing. 75% of the project will be done in H1FY27 and remaining in H2 FY27. Spread across phases 10000 MVA in FY26, 12500 MVA in FY27 and then 16000 MVA by FY28.

  • Capacity to be expanded by 6500 MVA total capacity will be 16000 MVA.

  • Margins:

    • Variable and fixed prices- 60:40% split in FY25. Variability depends on raw material prices.

    • 90% of orders from private customers, asking them to move on from fixed contract to variable contracts which is widely being accepted.

    • On a yearly basis, we are able to maintain margins as we envisage while taking orders.

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