01 — At a Glance
The ₹3,991 Transformer Story: Capex Done Right, Finally
- 52-Week High / Low₹6,125 / ₹2,804
- Q3 FY26 Revenue₹170 Cr
- 9M FY26 Revenue₹500 Cr
- Q3 FY26 PAT₹42.3 Cr
- 9M FY26 EPS₹113.43
- Book Value₹367
- Price to Book10.9x
- Dividend Yield0.32%
- Debt / Equity0.00x
- Capacity Expansion6,500 MVA by Apr’27
Auditor’s Opening Note: Nine months down, and Shilchar has already done ₹500 crore revenue (+28% YoY), ₹130 crore PAT (+42% YoY), maintained 31.7% EBITDA margins, and executed a ₹3,500 MVA capacity expansion that became live in August 2024. The stock is down 22% in six months. Which part of “71% ROCE in a debt-free balance sheet” is confusing? Even Alay Shah, the Chairman, seems more puzzled than relieved about valuation. Nine months into the fiscal, this company has already generated more cash than most small caps earn in a full year.
02 — Introduction
Welcome to the Land of Transformers — and We Don’t Mean Robots
Shilchar Technologies manufactures power transformers. Boring, right? Wait until you hear where they go. These boxes regulate electricity for solar farms, wind turbines, hydro plants, steel furnaces, cement kilns, and now — data centres. That’s literally every major capex project India has funded in the last decade. And yes, they export to 25+ countries across five continents.
The company was founded in 1986 by Alay Jitendra Shah. Three decades later, his sons Aashay (finance guy) and Aatman (operations guy) are running the show. Promoter holding is 62.1%, down slightly from 64%, which means the family is rational enough to monetize some wealth while keeping the keys. Their flagship 17-acre facility in Gavasad, Vadodara, now has 7,500 MVA of installed capacity, and another 6,500 MVA is being added by April 2027. They’ve also gone bonus 2:1 in April 2025 — which is usually code for “we can’t spend all this cash fast enough.”
From January 2026 investor presentation onwards, management confirmed: renewable energy drives 60% of domestic revenue. India is targeting 500 GW of renewable capacity by 2030 (currently at ~200 GW). Do the maths. Your local solar farm needs a transformer. Your regional wind power plant needs four. That’s where Shilchar lives.
But here’s the twist: this company has been compounding so hard that the stock market has no idea what to do with it. Revenue CAGR of 52% (last 5 years), profit CAGR of 151%, and a stock price that’s traded between ₹2,804 and ₹6,125 in the last 52 weeks. Someone is pricing this like a speculative small cap. Someone else is pricing it like a dividend growth story. Let’s figure out which is closer to reality.
Management Insight (Jan 2026): “Sustained momentum in domestic renewables. Gavasad Expansion #3 on track for April 2027. Order pipeline for FY26 is ₹750–800 cr.” Translation: they’ve already sold the year’s capacity and are building the next one.
03 — Business Model: WTF Do They Even Make?
Transformers That Transform India. Literally.
Imagine electricity as water. Transformers are the pipes that change its pressure. High-voltage power plants generate electricity at massive voltages. Transformers step it down for industrial use, then back up for transmission. Shilchar makes those pipes — custom-made, to spec, for renewable energy projects. They’re not commodity items. They’re bespoke engineering.
The business is simple: India builds 35–40 GW of renewable capacity annually. Each MW needs transformers. A ₹100 crore solar project might need ₹2–3 crore in transformer equipment. Shilchar’s market share in India’s transformer market is estimated at 15–20% in the renewable niche — which is the premium niche. Gulf Oil has market share in commodities. Shilchar has market share where margins are fat.
Revenue split is now 52% exports, 48% domestic. This is a shift. In FY22, it was 26% exports, 74% domestic. Why? Because India’s transformer industry is export-hungry, and Shilchar is producing at scale. CARE Ratings notes that STL’s top five domestic customers account for 58% of domestic revenue — customer concentration is real, but they’re all repeat customers (power companies, EPC contractors, utilities).
The operating model is “made-to-order.” They receive an order, source raw materials (copper, CRGO steel, transformer oil — all 80–85% of costs), manufacture, test, and ship. Order cycle is 3–9 months. Capacity utilization in FY25 was 77% (on the expanded 7,500 MVA base). Management expects 100% utilization by end of FY26. At which point they’ll run the new capacity expansion.
Renewable Energy60%Domestic Revenue
Export Markets25+Countries
EBITDA Margin31.7%9MFY26
ROCE71.3%FY25
Raw Material Notes: 43% of FY25 revenue came from exports. CRGO steel is imported, so forex risk is baked in. However, management reported ₹3.98 crore forex gain in FY25 (INR depreciation helps exporters). Back-to-back raw material purchasing (buy after order receipt) reduces inventory risk significantly. Working capital days in FY25 were 112 days — elongated from 93 days in FY24 due to rapid scale-up, but still manageable.
💬 How many of you know what a transformer does? And how many actually care? But if you own a solar panel at home, a bit of Shilchar’s handiwork is keeping it working. Do you feel the love now?
04 — Financials Overview
Q3 FY26: The Numbers Behind The Buzz
Result type: Quarterly Results (Nine Months Reported) | Q3 FY26 EPS: ₹37.01 | Annualised EPS (Q3×4): ₹148.04 | 9M FY26 EPS: ₹113.43
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 170 | 154 | 171 | +10.8% | -0.8% |
| EBITDA | 52 | 43 | 54 | +22% | -3.7% |
| EBITDA Margin % | 31% | 28% | 31% | +300 bps | -0 bps |
| PAT | 42 | 35 | 46 | +21.8% | -8.7% |
| EPS (₹) | 37.01 | 30.40 | 40.15 | +21.8% | -7.8% |
P/E Recalculated: Annualised EPS (Q3 EPS × 4) = ₹37.01 × 4 = ₹148.04. CMP ₹3,991 ÷ ₹148.04 = P/E 26.96x. But wait — the 9M FY26 annualised EPS (₹113.43 × 4/3) would be ₹151.24, or P/E 26.4x. Full-year FY25 EPS was ₹192.55 at book value ₹367, so current CMP ₹3,991 gives P/B 10.9x. Expensive for a stock trading at 24.7x P/E on consensus, but remember — this stock trades at a 8.5% earnings yield. The question isn’t “is it cheap?” The question is “is 71% ROCE worth 25x P/E?” Ask yourself that over a beer.
05 — Valuation: Fair Value Range
What’s This Company Actually Worth?
