Target: ₹9,835

CMP: ₹8,173.35

Shilchar Technologies operates in the niche segment of manufacturing transformers, specifically inverter duty transformers (IDT) and distribution transformers, catering primarily to the renewable energy sector (solar and wind).

It has the capability to produce transformers with voltage ratings of up to 132kV, though its focus remains on manufacturing transformers rated 66kV and below, which constitute the majority of its output. Approximately 50 per cent of its revenue is derived from exports, with average realisations of around ₹10 lakh per MVA.

To meet growing demand in both domestic and international renewable energy markets, the company has expanded its production capacity by 3,500 MVA.

The company has set an revenue target of ₹550 crore for FY25, aiming to further scale up to ₹750–800 crore in FY26. EBITDA margins are expected to remain strong at 25–28 per cent over the next two years, reflecting operational efficiency.

We recommend a ‘Buy’ rating for Shilchar Technologies with a target price of ₹9,835. This reflects a P/E multiple of 34.5x, based on an estimated EPS of ₹285.08 for FY27E. The company’s strong growth prospects, driven by 4X capacity expansion opportunity, improved EBITDA margin and favourable demand in renewable energy sector.