Voltas Ltd. share price target

A weak summer coupled with pre-buying activity in Q3FY18 (inventory build-up at the dealer's level prior to a change in energy norms) led flattish sales growth of unitary cooling product (UCP) on a YoY basis in Q4FY18. On the other hand, EMPS segment revenue growth of ~5% YoY was on the back of a pick-up in execution of domestic and international orders. Though Voltas continues to be the market leader in the room air conditioner segment, we believe rising competition restricted its market share gain at ~22% in FY18....

pushing the overall sales. The cost of ACs has increased by 10 to 15% in current fiscal due to the implementation of new ISEER (Indian Seasonal Energy Efficiency Ratio) ratings. AC makers have also moved to a common energy efficiency rating, ISEER rating as...

Consolidated revenues witnessed strong 16.5% YoY growth in Q3FY18 despite being a seasonally weak quarter driven by UCP segment which grew by 31.9% YoY. Strong performance of the UCP segment can be attributed to two factors a) pre-buying from dealers in anticipation of price hikes post implementation of new energy efficiency norms from Jan2018 and b) channel restocking post GST. The company continues to maintain its leadership position in Room Air Conditioners with market share of 23.7%. While Electro-mechanical projects and services (EMP) segment grew by 7.2% YoY on strong execution of projects, Engineering Products and Services (EPS) reported 14% YoY decline in revenue impacted by slowdown in textile industry. The order backlog for EMP segment stood at Rs 4,850 cr (1.7x...

Voltas posted 32% YoY growth in a lean quarter for Unitary Cooling (UCP) on (1) restocking of inventory post GST and (2) pre-buying ahead of star-rating changes (secondary channel can continue to sell at old prices).

Voltas (VOLT) Q3FY18 operational performance was in line with our expectations. While the revenue increased by 16% yoy the EBITDAM increased by 109bps yoy to 8.6%. APAT however remained flattish at 1% yoy. The Electro-mechanical Projects & Services (EMPS) reported steady revenue growth of 7% yoy. Revenues in the Unitary Cooling Products (UCP) increased by 32% yoy largely driven by a combination of restocking and pre-buying. The Engineering Products and...

Voltas reported a strong Q3FY18 performance led by unitary cooling product (UCP) segment wherein segment sales grew ~32% YoY led by low base of Q3FY17 and inventory build-up at the dealer's level prior to a change in energy norms. Besides, a pick-up in execution of orders led EMPS segment revenue growth of ~7% YoY. Despite intense competition, Voltas continues to be the market leader in the...

We maintain BUY with a SOTP-based TP of Rs 687 (valuing EMPS/EPS/UCP at Dec-19 P/E of 10/20/35x). Voltas reported strong revenue and EBITDA growth. Consolidated net revenue up by 16% YoY to Rs 13.7bn (in-line) driven by 7% growth in EMPS (55% of revenue) and 32% growth in UCP (45% of revenue). EBITDA and APAT grew by stellar 33% and 24%. Voltas reported strong revenue and EBITDA growth. Consolidated net revenue up by 16% YoY to Rs 13.7bn (in-line) driven by 7% growth in EMPS (55% of revenue) and 32% growth in UCP (45% of revenue). EBITDA and APAT grew by stellar 33% and 24%.

Voltas Ltd Q3FY18 results comment Revenue rose by 32.31% to Rs. 1364.95 Cr in Q3FY18 when compared to the previous quarter. Also, it increased by 16.21% when compared with Q3FY17.

Room Aircon: New energy ratings to result in complete portfolio overhaul To comply with the new energy-efficiency rating (EER) norms (which will be effective January 2018 onward), manufacturers will have to reassess their existing portfolios and formulate a renewed strategy to ensure a) a right product mix (inverter, fixed aircon) and b) right pricing (to pass on the impact of higher RM costs and rating changes). Under the new EER norms, inverter ACs will be rated as five stars, while fixed-speed compressor ACs will be rated four stars and below. Each manufacturer will thus have to decide on its strategy on...

Voltas' Room AC market share increased to 23% (+100 bps YoY) in a flat market. Management indicated while secondary sales were slow, 15% YoY growth in the UCP segment was largely driven by primary sales on account of restocking which should continue through Q3.