Multibagger Small-Cap Stock: Companies in the transmission and distribution (T&D) sector have seen their stock values soar exponentially in recent years, driven by several factors such as rising government capex, capacity additions in power plants in India and globally amid a strong rise in power demand, and major infrastructure developments.
One of the standout performers has been Indo Tech Transformers, a leading transformer manufacturing company, which has consistently delivered stellar returns by breaking record highs with each passing year.
Since February 2023, the small-cap stock has been on a sustained bull run, surging 1,220% from Rs184 apiece to its current trading price of ₹2,435. Impressively, during this period, the stock ended 14 months in positive territory, recording its highest monthly gain of 75% in April, followed by a 25% increase in January 2024.
Over the last four years, the stock has delivered a massive return of 2,410%. It ended CY23 and CY24 with stellar gains of 275% and 326%, respectively. Recently on January 09, the stock crossed the ₹3,700 mark to touch a fresh record high of ₹3,792 apiece. Meanwhile, the company has been securing new orders. In December, it received a Letter of Intent for the supply of 13 units of 150 MVA transformers, valued at ₹117.17 crore.
Indo Tech Transformers manufactures power, distribution, inverter, and converter special application transformers, catering to various industries such as transmission, generation, hydro, wind, solar, steel, cement, textiles, utilities, and DISCOMs. According to its website, over 56,000 transformers of different ratings, up to 245 kV, are in service across substations and industries in India and worldwide.
Its clientele includes renowned companies such as TNEB, NTPC, Adani, L&T, ABB, Siemens, NLC, Vestas, DVC, Gamesa, BGR, Suzlon, Tata Projects, KEC International, Regen Power Tech, Reliance, Walchand, TKIS, Doosan, and GE, along with leading hotels, hospitals, and steel and cement plants.
Looking at its financials, the company reported a net profit of ₹18 crore in Q2FY25, while revenue from operations stood at ₹146 crore.
Well-Positioned
India’s electricity demand has been growing exponentially in recent years, driven by rising urbanization, the expansion of manufacturing facilities, a surge in data centers, and the government’s initiative to achieve 100% electricity access across the country.
To meet this rising demand, about 80 GW of additional thermal capacity will be required over the next decade, according to the government. While coal-fired generation will remain dominant, its share in total electricity generation is expected to decline from 74% in 2023 to 68% in 2026. Meanwhile, renewable energy generation is projected to grow from 21% to 25% of the total energy mix by 2026.
With India’s installed power capacity expanding rapidly, the Power & Distribution Transformer Market is well-positioned for growth. The market size is projected to reach USD 8.41 billion by 2030, with an estimated CAGR of 10.84% during the forecast period (2024-2030).
Moreover, as one of the world’s fastest-growing economies, India continues to attract significant foreign investments, alongside robust public and private infrastructure development. This, in turn, has fueled the expansion of electricity generation, transmission, and distribution infrastructure, driving increased demand for power and distribution transformers in recent years and expected to continue in the coming years as well.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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