Voltas Ltd. share price target

maintaining annual margin guidance at 11%. MEP segment shall continue to focus on domestic projects in Urban Infra and Rural Electrification. With Voltas Beko JV to remain in an investment phase over the next 2-3 years, we expect the JV to drag profitability in the medium term and report a loss of Rs1.5bn/Rs1.2bn in FY20/21. We estimate 18% EPS CAGR over FY19-22 and value the stock at 28x Sept21 EPS. Maintain Hold with a target price of Rs662. Sales flat at Rs14.2bn; Adj PAT up by 8.8%: Revenues were flat YoY at Rs14.2bn as gains from UCP segment were offset by fall in EMPS segment. Benign...

Voltas Limited, part of the TATA group, is a leading air conditioning and engineering services...

Voltas has indicated that while other consumer durable products saw a slight slowdown, demand for cooling products such as room air conditioners (RAC), air coolers and refrigerators remained firm during H1FY20. The volume growth of RACs is likely to remain strong in H2FY20 as well supported by demand remaining intact from Tier II, Tier III cities. In addition to this, deferral of rating change norm by a year coupled with absence of price hikes would help drive volume growth of industry, going forward. The management further said that despite launch of various premium SKUs in...

Voltas Analyst meet indicated cautious demand scenario post positive start to UCP in FY20 as continuing slowdown in the economy can negatively impact festive season sales. The management has maintained annual margin guidance of 11% in UCP. With no presence in key product segments (Direct Cool refrigerator & Semi-automatic Washing Machines) Voltbek is unlikely to make any major inroads this festival season. It is expected to remain in an investment phase over the next 3-4 years given expenses on distribution, branding and stiff competition in white goods market. We estimate the JV to...

We maintain our Hold rating on the stock with a target price of Rs. 635 based on 29x FY21E adjusted EPS. Margins contract as costs increase Q1FY20 revenue was Rs. 2,647cr (up 24.0% YoY) against Rs. 2,134cr. for the same period last year. EBITDA margin declined 39bps YoY due to an increase in cost of sales (up 26.7% YoY), marginally offset by a decrease in employee benefit expenses (down 8.0% YoY). Reported PAT reduced 10.2% YoY to Rs. 165cr, as the VRS scheme...

Sustained market leadership in room AC segment and foray into other consumer durables segments continue to augur well for Voltas. At CMP, the stock trades at 30.6x of FY20E and 26.5x of FY21 earnings. Reducing our earnings estimate by 6%/3% for FY20E/FY21E, we reiterate our BUY recommendation on the stock with a revised Target Price of Rs663 (from Rs681...

Voltas's UCP segment revenue growth at 47% was much higher than domestic air conditioner industry growth of 36% during Q1FY20. With a slight gain in market share (~24% market share in Q1FY20) coupled with rising contribution of inverter AC into sales (Inverter AC contributes ~50% in AC sales) helped drive the UCP division performance in Q1FY20. The management guided for a strong demand recovery in the UCP division given the low base of last year, low channel inventory and strong order from EESL. On the EMPS front, the management guided for a revival in the business...

Voltas reported stellar Q1FY20 results (revenue/EBITDA/adj. PAT up 12%/18%/13% from estimate) driven by better-than-expected improvement in UCP segment.

Operating performance exceeds expectations: Consol. revenue increased 24% YoY in 1QFY20, exceeding our estimate by 11%, led by strong 47% growth in UCP segment. As a result of a higher effective tax rate (32% v/s our estimate of 27%) and higher losses in JVs, net profit increased at relatively low rate of 6% YoY to INR1.9b (in-line). Strong summer trumps consumption slowdown: According to management, industry growth stood at 36% for the quarter. Against the backdrop of slowing consumption in the economy, this validates that the...

Voltas remains confident of achieving annual margins of 11% in UCP segment Change in Estimates | Target | Reco led by 1) strong 1Q20 performance on the back of favourable summer season & delayed onset of monsoon 2) launch of new technology products in AC with...