@aveekmitra
@basumallick
@Anant
@rohithpotti
I would like to add my 2 cents here.
I am an Electrical engineer & own a manufacturing unit of small size customised Industrial grade transformers.
Around 5 years back, I happened to foray into the Power Transformer & Distribution Transformer segment to cater to local demand as well as SEBs.
Unfortunately, as compared to Industrial transformer segment, the rules of the trade are totally different in Power / Distribution transformer segment.
The transformer industry suffers from many plagues as rightly pointed out by Anant Jain. I would just like to add a few to those :
1) Although the transformer being a critical component, where emphasis on quality is a must., its pricing decided by the competition & the customers., makes it as good as a commodity product.
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There is over supply on the domestic front, as well from other countries specially China.
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There is intense competition on the sub-220 KV transformers., leaving any place for margin expansion for the manufacturer.
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On Transformers beyond 220KV range, the market has only a few players. But the quantity to support production & make it profitable, is not as high. To add to it., any transformer of the higher capacity requires high end testing facility to be built, which only adds heavily to the initial investment.
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Almost all the transformer manufacturing companies have been on the negative profit growth since 2010.
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The ROCE of any company, hence, in this sector is very poor.
My personal advice to fellow investors would be to look for profitable companies other than this sector. Many are available.