Item: Voltas Ltd.
Rating: 3
Author: Motilal Oswal

Room AC industry to post double-digit growth in FY20

Neutral: Voltas Ltd.

Target

Motilal Oswal

13 March 2019 Capital Goods AC industry to register double-digit growth in FY20 on back of a pick-up in demand in certain pockets of the country. VOLT expects volumes to increase in March- April (post the festive season of Holi). Inventory levels have started to recede and primary channel filling has increased. The new facility will come up in phases with the INR5b capex spread over the next five years; annual capex will be in the range of INR1b. VOLT expects the factory to start in 2H 2020. margins to settle around 11-12% on sustainable basis, despite its inability to take price hikes given the subdued demand, INR depreciation and increase in competition, raw material cost, and import duty on compressors and completely built units (CBUs). EBIT margins for 9MFY19 for the UCP segment stood at 9.1%. 4Q margins for VOLT over the last five years stood at an average of 16.9%.

Comment

Name	Companies Held
Subramanian P	114
Hitesh Ramji Javeri	59
Globe Capital Market Ltd	51
Dipak Kanayalal Shah	39
Mahendra Girdharilal	38

Name	Companies Held
reliance-capital-trustee-co-ltd	157
Hdfc Trustee Company Limited	156
Bank Of India	132
BIRLA-SUN-LIFE-TRUSTEE-COMPANY-PRIVATE-LIMITED	127
general-insurance-corporation-of-india	82

Name	Returns(%)
Name	Week	Month	Year
HDFC Top 200 Fund - Reg - G	0.50%	8.10%	14.75%
SBI MAGNUM EQUITY FUND - Reg - G	0.48%	5.96%	12.26%
Canara Robeco Large Cap+ Fund - Reg - G	0.41%	6.04%	11.67%
UTI - Equity Fund - Reg - G	-0.06%	6.15%	11.33%
Kotak Classic Equity Scheme - Reg - G	0.08%	5.31%	11.04%

Name	Returns(%)
Name	Week	Month	Year
MIRAE ASSET EMERGING BLUECHIP FUND - Reg - G	-0.04%	7.77%	10.48%
Axis Midcap Fund - Reg - G	-0.50%	4.75%	10.10%
Birla Sun Life Top 100 - Reg - G	-0.34%	6.29%	6.73%
SBI EMERGING BUSINESSES FUND - GROWTH - Reg - G	0.45%	6.95%	6.59%
Peerless Midcap Fund - Reg - G	-0.07%	7.01%	6.48%

Name	Returns(%)
Name	Week	Month	Year
Axis Equity Fund - Reg - G	0.04%	4.07%	14.12%
HDFC Equity Fund - Reg - G	0.43%	8.59%	12.48%
Mirae Asset India Opportunities Fund - Reg - G	0.08%	6.64%	12.36%
Canara Robeco Equity Diversified - Reg - G	0.02%	5.82%	11.93%
Parag Parikh Long Term Value Fund - Reg - G	0.00%	3.93%	9.32%

Voltas Ltd.

Room AC industry to post double-digit growth in FY20

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