 "This transformer stock surged 55% in 7 days; zoomed 1229% in 18 months")
Shares of Indo Tech Transformers hit a new high of Rs 2,506.95, surging 5 per cent on the BSE in Thursday’s intra-day trade in an otherwise weak market on healthy business outlook. In the last seven trading days, the stock of transformers company has soared 55 per cent from level of Rs 1,615.10 touched on October 10. In comparison, the BSE Sensex was down 0.67 per cent at 80,956 at 03:04 pm.
In the last 18 months, the market price of Indo Tech Transformers has skyrocketed 13 times or 1,229 per cent from level of Rs 188.60 on the BSE. Currently, the stock is trading under ‘T’ or Trade-for-Trade (T) group. The T group is a surveillance measure that requires securities to be settled on a trade-to-trade basis.
The company is engaged in the business of manufacturing power and distribution transformers and various special application transformers, mobile sub-station transformers and sub-stations.
For the financial year 2023-24 (FY24), Indo Tech Transformers had posted a robust 82 per cent year-on-year (YoY) growth in profit after tax (PAT) at Rs 46.86 crore and operational revenue grew 35.8 per cent YoY at Rs 503.60 crore.
In the June quarter of the current financial year 2024-25 (Q1FY25), the company’s PAT jumped 66.7 per cent at Rs 5.91 crore. Revenue from operations, however, declined 11.8 per cent YoY at Rs 82.15 crore.
According to market experts, the transformer industry is flushed with orders and the demand outlook is positive vis-a-vis end use in various industries such as railways and renewables. The pent-up demand from industrial expansions backed by a rise in capex is leading to higher consumption of power in India, in turn leading to improved order books for transformer manufacturers, Indo Tech Transformers said in FY24 annual report.
The transformer market in India is poised for robust growth, driven by a confluence of demand drivers, technological innovations and policy imperatives. The government’s continued focus on infrastructure development, coupled with investments in smart grid technologies and renewable energy integration, will fuel demand for advanced transformers across the utility, industrial, and commercial segments, the company said.
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The India Power & Distribution Transformer Market size was valued at around $3.97 billion in 2023 and is projected to reach around $8.41 billion by 2030. Along with this, the market is estimated to grow at a compounded annual growth rate (CAGR) of around 10.84 per cent during the forecast period, i.e., 2024-30.
The market growth is attributed to the soaring development in the nation’s installed power capacity, which has been in line with the burgeoning urbanization, and the government’s initiative to achieve 100 per cent access to electricity across the country.
Moreover, India is a rapidly growing economy in the world that is witnessing consistent foreign investments, public & private infrastructure development, etc. This in turn has fueled the construction of electricity generation, transmission, and distribution infrastructure. Thus, the need for power & distribution transformers in the country has surged in the past few years, according to Indo Tech Transformers.
The mission aims to produce about 5 million tons of green hydrogen through around 125 GW of new renewable power capacity by 2030. Green hydrogen production in India is primarily reported to be with the help of electricity generated from captive solar power plants being established. These massive GH2 manufacturing units and their captive power plants would further necessitate the demand for power transformers for load balancing during routine operations, creating lucrative growth opportunities for the India Power & Distribution Transformer Market in the forthcoming years, the company said.