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Voltamp Transformers' stock hit the lower circuit on Wednesday, shedding 20% of its value after the company revealed a disappointing fourth-quarter earnings report. Shares tumbled to ₹10,016 on the National Stock Exchange (NSE), wiping approximately ₹3,000 crore from its market capitalization.
Dismal Fourth Quarter
The sell-off was primarily driven by a significant drop in profitability. Net profit for the January-March 2025 quarter (Q4FY25) plummeted to ₹48 crore, a 50% decrease from ₹97 crore in the same period last year. Revenue from operations dipped slightly by 1% to ₹617.22 crore from ₹624.81 crore a year earlier. Earnings before interest, tax, depreciation, and amortization (Ebitda) also declined 30% year-on-year to ₹79.77 crore, pushing the Ebitda margin down to 13.17% from 18.63%.
Fiscal Year Resilience and Dividend
Despite the weak quarterly performance, Voltamp Transformers reported a more robust showing for the full fiscal year 2025-26 (FY26). Net sales and service revenue climbed 11.34% year-on-year to ₹2,153.68 crore. For shareholders, the company's board recommended a final dividend of 1000% (₹100 per share), subject to approval. The company began FY26 with an order backlog of ₹1,200 crore and secured new orders worth ₹310 crore in April 2025, indicating continued demand for its products.
Investment Accounting and External Pressures
Voltamp Transformers attributed the quarterly profit slide to several factors, including accounting adjustments. The company had invested heavily in long-term securities when interest rates were at their peak, previously generating strong mark-to-market (MTM) gains. However, rising yields on long-term government securities in the March quarter resulted in negative MTM gains, impacting reported profits, even though the underlying investment strategy is long-term.
External pressures also mounted. A depreciating rupee raised the cost of imported raw materials. Meanwhile, vendors prioritized export markets, causing sharp cost increases for critical components and passing on higher input expenses. The conflict in the Middle East also significantly increased transformer oil prices, adding further cost challenges.