Vilas Transcore LtdQ1 FY25Industrial Products

Vilas Transcore Ltd

Q1 FY25 Earnings Call Analysis

Management growth scorecard

Revenue

Category 1

Margin

Category 2

Fundraise

Yes

Order

N/A

Capex

Yes

3 of 4 growth signals are positive.

Revenue guidance

Category 1

→Targeting INR600 crores revenue for FY '26 with 60%-70% growth.
→Expecting a revenue run-rate of INR1,000 crores by FY '27.
→Plan to triple CRGO lamination capacity, aiming for 12,000 metric tons annually this year, with further growth to 24,000 metric tons next year.
→Nanocrystalline cores and radiators expected to contribute significantly starting July 2025.
→Long-term CAGR growth of 30%-40% anticipated post-FY '27 due to product portfolio expansion.
→No plans to enter transformer manufacturing; focus remains on transformer components and adjacent products.
→Growth driven by increasing demand, new customers, and market expansion without taking share from competitors.
→Export contribution targeted at 2%-3% in the near term, expanding gradually.

Category 2

→Targeting INR600 crores revenue in FY '26 with 50% utilization of new capacity; aiming for 12,000 metric tons from new plant this year.
→Post FY '27, expecting 30-40% CAGR growth driven by expansion beyond current 3 products and introduction of new products after studies.
→Stable EBITDA margins forecasted around 14%, with some fluctuations of 1-2%.
→Nanocrystalline cores and transformer radiators, with EBITDA margins of 25% and 22% respectively, to enhance overall profitability.
→Other income expected to decrease from INR9 crores due to planned funds utilization.
→Operational efficiency and order book visibility suggest strong earnings growth sustained by diversification and capacity expansion.
→Tax rate expected to normalize to ~25% after one-time IPO expenses.
→Depreciation to rise INR4-5 crores next year due to capex, but asset turnover projected at 10x, indicating efficient scale-up.

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Yes

→No explicit mention of planned new equity fundraising beyond the recent IPO.
→Current capex largely funded by IPO proceeds (around INR50 crores spent till March, with total capex expected around INR90 crores).
→For working capital requirements related to the new plant, the company plans to use non-fund-based bank limits rather than taking fresh debt.
→No immediate plans for additional debt; if working capital needs arise, they will approach banks for non-fund-based limits.
→The company aims for strong cash flow and currently does not anticipate needing further borrowings.
→Future investments and product expansions will be evaluated based on financial position post current capex and market conditions.

→Radiators: Full visibility on orders.
→CRGO Lamination: Orders come monthly; typically maintain 45 to 60 days order book.
→Two major customers have quarterly contracts for lamination, currently under delivery.
→Overall order book targets INR 600 crores revenue for next financial year.
→First half expected around INR 260-300 crores; possible shortfall in first half balanced by higher second half.
→Customers are fully booked for key products.
→Export orders currently contribute ~2-3% of revenue, with plans to increase gradually.
→New product studies underway for future order book expansion.
→Targeting 12,000 metric tons from old plant and 12,000 from new plant this financial year, totaling 24,000 metric tons.
→Order book predominantly for power and solar inverter duty transformers (60%-80%).

Yes

→Completed capex of around INR50 crores till March 31, 2025, mainly from IPO funds.
→Total planned capex is approximately INR90 crores, with the remaining spend expected in April to June 2025.
→Capex used for expanding CRGO lamination capacity by 24,000 metric tons, radiator manufacturing line (7,200 tons per annum), and adding nanocrystalline core production.
→Full-scale commercial operation of new capex targeted by July 2025.
→Additional depreciation from new plant expected around INR4-5 crores next year.
→No plans to take on debt currently; working capital needs expected to be managed with non-fund based limits if required.
→Parallel study ongoing for introducing one more product within transformer components, to be announced after completion.

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