Started in the year 2006, Vilas Transcore Limited is engaged in the manufacturing and supply of components used in the power distribution and transmission sector, primarily to transformer and other power equipments manufacturer in India and abroad. They manufacture and supply a different range of electrical lamination cold rolled grain oriented (C.R.G.O.) lamination core, CRGO slit coils, CRGO stacked (assembled cores), CRGO wound core and CRGO Toroidal core which are mainly used in power transformer, distribution transformer & dry type transformers, high voltage / medium voltage & low voltage current transformers. They manufacture the products keeping in mind the industry standards and specifications given by the customer, with the use of latest technology to manufacture the products and offer the customers with the defined requirements based on the product dimensions and materials for application in the power & distribution equipment industry. They are majorly catering to the power distribution and power engineering industry. The products, CRGO laminated Core, CRGO core and slit coils are one of the most important parts of different kinds of power transformer, distribution transformer & other current transformers. The core of a transformer is a very important part for the proper functioning of the transformer. The core of the transformer are made through laminated sheets which are used to minimize current losses and CRGO steel material is used to minimize hysteresis losses, it provides a low reluctance path for electromagnetic flux and supports the primary and secondary windings of transformer. The core is laminated to reduce these currents to a minimum as they interfere with the efficient transfer of energy from the primary coil to secondary coil. Considering the importance of core, many points are kept in mind while the designing and manufacturing of the laminations, like manufacturing, functional reliability, longer service life, economy etc. The use of proper material & optimization of the shape are also very important for the efficiency of the transformer. Currently, company operates from the two manufacturing facilities located at Por near Vadodara, Gujarat. The manufacturing unit 1 is admeasuring an area of over 2200 sq. mtrs. The manufacturing Unit 2 is also being used as the registered office for the Company is spread over an area of over 11000 sq. mtrs. The plant configurations, allow them to produce the CRGO lamination and CRGO core based on the different requirements of the customers pertaining to the dimensions, size and material requirements. They have a combined installed manufacturing capacity of 12,000 MT including the CRGO laminations, coils, assemble and cores. Our manufacturing facility has been certified for conforming to the standards of quality management systems i.e., ISO 9001:2015 and has been approved for sourcing toroidal core for current transformers (CT) upto 400 KV class for Power Grid projects. They have over the years, established long standing relationships with several well-known Indian and global transformer manufacturers. The customer base is well diversified over the transformer and power equipment manufacturers. While the top 5 customers contributed 10,350.7 Lacs, 17,323.4 Lacs, 18,370.6 Lacs and 15,786.25 Lacs, respectively, of the revenue from operations in Fiscal 2021, 2022 and 2023 and in the nine months ended December 31, 2023. Further, the single largest customer contributed 7,050.85 Lacs, 12,527.98 Lacs, 12,100.00 Lacs and 9885.39 Lacs, respectively, of the revenue from operations in Fiscal 2021, 2022 and 2023 and in the nine months ended December 31, 2023. The major customers include companies like Voltamp Transformers Limited, Electrotherm India Limited, Atlas Transformers India Limited, Shilchar Technologies Limited etc. They strive to maintain the quality standards and requirements specified by the customers for the quality of the products. The company also undertake job work activities which amounts to Rs. 271.22 Lakhs, Rs. 352.74 lakhs, Rs. 80.32 lakhs and Rs. 16.90 Lakhs which is approximately 1.23%, 1.25%, 0.34% and 0.13% of the Revenue from Operations for the period December 2023, March 2023, March 2022 and March 2021 respectively. The Job Work consists of cutting and slitting the materials received from customers according to their needs. As per financial performance, Vilas Transcore Limited has posted total income / net profits of Rs 134.85 Cr / Rs 5.23 Cr (FY21), Rs 235.18 Cr / Rs 17.91 Cr (FY22), Rs 284.78 Cr / Rs 20.22 Cr (FY23) and Rs 238.30 Cr / Rs 16.79 Cr (upto Q3 FY24). So as per previous financials data, company has shown good growth. Company has posted an average EPS of Rs 9.42 and average RoNW of 15.41% for last three fiscals. Issue is priced at a P/BV of 1.93 as per NAV of 76.25 as on 31.12.23. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 20.09, 17.79 and 16.07 respectively, which looks fully priced. As per RHP, there is no listed peers. On BRLM's front, Hem Securities Limited is associated with this SME IPO and handled 41 SME IPOs in last 3 year. From last 10 SME IPOs, one opened below and remaining opened above issue price on the day of listing. As of now from last 10 SME IPOs, all are trading above issue price. ( As on 17.05.24 ) As per financials, Vilas Transcore Limited has shown good growth, RoNW is 16.79% and P/E is respectively 20.09, 17.79 and 16.07 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of manufacturing and supply of components used in the power distribution and transmission sector, which is highly fragmented and competitive business segment. BRLM performance is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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