Voltamp Transformers Ltd Management Discussions.


The trend throughout the year has been volatile, marked by the second-wave led devastations during the first quarter of the fiscal. A sharp uptick in July because of pent-up demand was followed by the economy treading a steady path till December 2021. A slowdown in momentum post-December was on account of supply-side constraints and soaring commodity prices.

However, the economy bounced back in March as indicated by various high-frequency indicators. With rising mobility and relaxation in travel restrictions, consumer spending picked up during the month. This is also visible from an all-time high GST collection of 1.4 lakh crore and robust E-way bill issuances in March 2022. Services activity improved in March, with PMI-services rising to a three-month high of 53.6 from 51.8 in February. Vehicle registrations (reflecting discretionary consumption) data across two-wheeler and passenger vehicles (PV) categories showed an improvement in March. Power consumption, which is reflective of overall economic activity also surged by 19% on a sequential basis.

With commodity prices, including that of crude oil, on the boil, the outlook for domestic producers remains gloomy. Critical raw material i.e. silicon steel (CRGO electrical grade steel) for transformer industry has become scare commodity post geopolitical situation change and price has almost double with non availability in require tonnage. Going ahead, a lot will depend on the trade negotiations between India and Russia. On the demand front, the outlook remains positive owing to reduced threat of Covid-19, resumption of commercial activities and pickup in credit offtake. Further, the rabi crop entering the market starting in April would provide a substantial boost to the rural income and thereby support rural demand. Urban demand is also expected to improve aided by improved mobility. However, downside risk remains due to intensifying inflationary pressures that could erode consumers purchasing power.

Going ahead, global factors will continue to pose risks to Indias economic progress. The uncertainty arising from ongoing geopolitical conflicts, which is reflected in rising global commodity prices, and a differing pace of monetary policy normalization, global supply chain disruptions, strengthening input price pressures, shortages of key inputs and elevated freight cost could have adverse implications for the economy.


The Government of India has identified power sector as a key sector of focus to promote sustained industrial growth. Under the Union Budget 2022-23, the government announced the issuance of sovereign green bonds, as well as conferring infrastructure status to energy storage systems, including grid-scale battery systems. The Government also allocated 19,500 crore (US$ 2.57 billion) for a PLI scheme to boost the manufacturing of high-efficiency solar modules. Electrification in the country is increasing with support from schemes like DeenDayal Upadhyay Gram Jyoti Yojana (DDUGJY), Ujwal DISCOM Assurance Yojana (UDAY), and Integrated Power Development Scheme (IPDS). In February 2022, a parliamentary standing committee recommended the government take steps to increase the loan limit for the renewable energy sector under priority sector lending. The current limit stands at Rs. 30 crore (U$ 3.93 million).

In November 2021, the government announced future plans to increase the funding under the PLI scheme for domestic solar cells and module manufacturing to 24,000 crore (US$ 3.17 billion) from the existing 4,500 crore (US$ 594.68 million) to make India an exporting nation. Energy Efficiency Services Limited (EESL) stated that it will partner with private sector energy service companies to scale up its Building Energy Efficiency Programme (BEEP). The investment envisage under the Government PLI scheme for 14 key sectors will be sizable and can result in better order availability to the Company in medium term.

The Company is witnessing gradual improvement in market sentiments with enquiry and order finalization taking place on project progress basis. Decision making is slow with steep increase in product prices with unprecedent increase in input price and payment realization towards goods (awaiting dispatch) is taking long time. With economic expansion, rise in Government and private CAPEX (specially CAPEX for road, renewables and production linked incentive (PLI) schemes, the Government is continuously taking measures to ramp up power generation from green sources (like solar, wind) to meet the medium to long-term power demand, the medium term prospects looks promising for the Company.


Profit Before Tax (PBT), Profit After Tax (PAT), and Sales and Services Income of the last five years.

The Company has achieved net sales and service revenue of Rs. 1127.20 Crores as compared to Rs. 692.30 crores in the previous year and the PBT increased to Rs. 173.20 crores as compared to Rs. 140.46 crores in the previous year and PAT increased to Rs. 133.28 crores as compared to 111.21 crores in the previous year.


The major factors affecting future results of operations of your Company are the currency fluctuation, competitive pressures from local as well as recently entered International competitors,Govt. policies on power and infrastructure sectors and project implementation, large unutilized capacity in Industry, aggressive pricing, continuing and highly volatile raw material prices, Covid-19 pandemic and timely availability of imported raw materials at budgeted cost.


The Company continue its focus on development of human resources. The Company is a firm believer that its employee are its strength and the Company therefore respects individual rights and dignity of all its employees. The relations of the management with employees during the year continued to be cordial.Learning and development has been strengthened to bring value addition in the employee and to enhance team building leading towards success. The Company focuses on providing the employees, employee - friendly environment and culture and career growth opportunities.


The Company has in place, commensurate with the size and complexity of Companys business operation,effective internal control systems and policies for compliance of laws and to safeguard the interest of the Company. The Company maintains a system of internal controls designed to provide reasonable assurance regarding the efficiency and reliability of operations and for safeguarding the assets of the Company and for ensuring appropriate recording and reporting of financial information for ensuring reliability of financial controls and for ensuring compliance of applicable laws and regulations.

The internal financial controls are adequate and are operating effectively and there are proper systems in place to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

The internal audit covers a wide variety of operational matters and ensures compliance with specific standards with regard to reliability and suitability of policies and procedures.

The internal auditors report to the top management through CFO and continuously monitor adherence to laid down systems and policies. Services of internal auditors are being outsourced through established audit firm. The systems are regularly reviewed and modified for changes in operating and regulatory requirements.

The Audit Committee reviews the adequacy and effectiveness of internal control systems and suggests improvement for strengthening the same from time to time.


Currently the geo-political situation, supply chain issues, volatile commodity prices be crucial parameter to watch while forecasting upcoming businesses opportunities. Unprecedent increase in major material prices is also a 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.


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, bonds, debentures, fixed deposits, PMS, tax-free bonds, etc. and the Company has efficient working capital management. 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.


In accordance with the SEBI (Listing Obligations and Disclosure Requirements 2018) (Amendment) Regulations, 2018, the company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key sector specific financial ratios.


Sr No. Ratios As at 31st March, 2022 As at 31st March, 2021 Variance Reason for variance
1 Debtors Turnover (no. of days) 58.47 84.62 44.71 Better receivable management with
curtailing credit period and order
booking with assured payment terms.
2 Inventory Turnover (no. of days) 70.04 83.79 19.63
3 Interest Coverage (no. of times) NA
4 Current Ratio (no. of times) 4.80 5.16 -7.00
5 Debt Equity Ratio
6 Operating Profit Margin (%) 11.78 10.04 17.33
7 Net Profit Margin (%) 11.35 14.67 -22.63
8 Return on Networth (%) 18.44 16.92 8.97


Year ended 31st March FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY 21 FY 22
(Rs. in crores)
Net Sales (A) 515.50 444.78 516.89 563.30 610.94 639.02 828.83 858.58 692.30 1,127.20
Expenditure (B) 481.32 429.81 497.14 525.89 550.75 573.00 735.25 744.84 615.28 988.21
EBITDA (C=A-B) 34.18 14.97 19.75 37.41 60.18 66.02 93.58 113.74 77.03 139.00
Interest & Bank Charges (D) 0.49 0.37 0.30 0.43 0.51 0.56 0.00 0.00 0.01 0.80
Depreciation (‘E) 7.67 7.13 7.22 5.98 5.82 5.99 7.15 8.99 8.85 7.94
Other Income (F) 20.02 26.74 21.16 28.29 38.98 40.67 36.25 8.61 72.29 42.95
PBT (G=C-D-E+F) 46.03 34.21 33.39 59.29 92.83 100.14 122.68 113.36 140.46 173.21
Tax (H) 13.13 7.92 4.98 15.31 20.62 26.66 37.84 23.98 28.24 40.37
PAT (I=G-H) 32.90 26.29 28.41 43.98 72.21 73.48 84.84 89.38 112.22 132.84
Other Comprehensive (0.35) (0.11) 0.05 (0.44) (1.00) 0.45
Income/(Expense) (OCI) (J)
TOTAL OCI (K=I+J) 32.90 26.29 28.41 43.98 71.86 73.37 84.89 88.94 111.22 133.29
Key Ratios (%) FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY 21 FY 22
EBITDA Margin (L=C/A*100) 6.63 3.37 3.82 6.64 9.85 10.33 11.29 13.25 11.19 12.33
Net Margin (M=K/(A+F)*100) 6.14 5.58 5.28 7.43 11.06 10.79 9.81 10.26 14.54 11.39


Statements in this report on Management Discussion and Analysis relating to the Companys objectives, projections, estimates, expectations or prediction may be forward looking within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and expectations of future events. By their nature, forward-looking statements require the company to make assumptions and are subject to change based on risks and uncertainties. Actual results might differ materially from those expressed or implied depending upon factors such as climatic conditions, global and domestic demand-supply conditions, finished goods prices, raw materials cost and availability, foreign exchangemarket movements, changes in Government regulations and tax structure, economic and political developments within India and the countries with which the Company has business and other factors such as litigation and industrial relations. The Company assumes no responsibility in respect of forward looking statements herein which may undergo changes in future on the basis of subsequent developments, information or events.