At a Glance:
Shilchar Technologies went from being a small transformer manufacturer to a high-ROE, zero-debt, margin-minting beast. With ROCE of 71%, 5-year profit CAGR of 151%, and absolutely no borrowings, it’s electrifying investors. But at 17.5x book and 41x earnings – is the transformer overheated?
🔌 WTF Do They Even Do?
- 🧲 Business: Manufacturer of Power & Distribution Transformers and Electronics & Telecom Transformers
- 🔧 Recently entered Ferrite Transformers – targeting next-gen energy systems
- 🏭 Products range from 5 KVA to 15 MVA
- ⚡ Serves power utilities, industrial clients, and telecom companies
💰 Financials Overview (Last 5 Years)
| Metric | FY20 | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|---|
| Revenue (₹ Cr) | 71 | 118 | 180 | 280 | 397 | 623 |
| Net Profit (₹ Cr) | 2 | 6 | 14 | 43 | 92 | 147 |
| OPM (%) | 4% | 8% | 11% | 19% | 29% | 30% |
| EPS (₹) | 1.32 | 4.84 | 12.32 | 37.82 | 80.61 | 128.82 |
| ROE (%) | 4% | 13% | 24% | 53% | 52% | 53% |
| ROCE (%) | 4% | 13% | 24% | 54% | 75% | 71% |
📈 5-Year Revenue CAGR: 54%
📈 5-Year PAT CAGR: 151%
💸 Debt: 0.0 – literally zero
📊 Valuation – Meh, Cheap, or Crack?
| Metric | Value |
|---|---|
| P/E | 41.6x |
| Price to Book | 17.5x |
| EV/EBITDA (est.) | ~29-30x |
| ROE / ROCE | >50% |
| Fair Value Range | ₹3,800 – ₹4,500 |
⚠️ Valuation reflects market love, but future growth must justify it.
📉 Anything less than 40% profit CAGR from here and derating risk is real.
📰 What’s Cooking?
- 🧾 June 2025: Investor group site visit – signalling strong interest
- ⭐ CARE Ratings: Upgraded to A/Stable + A1 for bank facilities
- 👋 Independent Director exited in March 2025 (routine)
🧾 Balance Sheet – How Much Debt, How Many Dreams?
- 🏦 Debt: ₹0 (yes, even PSU banks are jealous)
- 💰 Reserves: ₹339 Cr (up from ₹202 Cr in FY24)
- 🏗️ Fixed Assets: ₹59 Cr → modest capex despite strong growth
- 📈 Other Assets: ₹377 Cr → likely working capital and trade receivables
But 👇
🔁 Working Capital Days:
Went from 77 in FY24 → 144 in FY25 → 🚨 Red flag on receivables or inventory build-up
💵 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | FCF Trend |
|---|---|---|
| FY24 | ₹76 | Strong |
| FY25 | ₹40 | ⚠️ Dropped 47% YoY |
Investing cash flow also jumped to -₹48 Cr → likely capex & expansion (reasonable)
📊 Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROCE | 71% |
| ROE | 53% |
| OPM | 30% |
| Debtor Days | 134 |
| Inventory Days | 87 |
| CCC | 120 |
🚨 CCC & Debtors need cleanup. Otherwise – chef’s kiss 🔥
🧬 P&L Breakdown – Show Me the Money
- 🪙 FY25 Revenue: ₹623 Cr
- 💸 Operating Profit: ₹185 Cr
- 💰 Net Profit: ₹147 Cr
- EPS: ₹129
- 🪙 Dividend Payout: ~6% → stingy, reinvesting mostly
🕵️ Miscellaneous – Shareholding, Promoters
| Category | Stake (%) – Jun 2025 |
|---|---|
| Promoters | 64.01% |
| FIIs | 2.09% |
| DIIs | 0.12% |
| Public | 33.77% |
👥 Shareholders jumped from 2,400 to 41,000+ in 2 years – clear retail FOMO
No recent dilution – equity doubled in FY24 due to bonus/split (to be verified)
🧠 EduInvesting Verdict™
🔥 Shilchar is a fundamentally killer company with elite margins and profitability. But trading at 41x earnings and 17.5x book, it has little room for error.
Unless you’re betting on a transformer supercycle or export boom… valuations may shock you more than their products ⚡
🎯 Fair Value Range: ₹3,800 – ₹4,500
(Assumes 30-35% forward profit growth and 25–30x P/E multiple)
Anything above ₹5,300 is entering frothy zone.
✍️ Written by Prashant | 📅 28 June 2025
Tags: Shilchar Technologies, transformer stocks, ROCE 70%, SME multibagger, power infra, Shilchar vs Waaree, high PE stock, EduInvesting analysis, fair value
