Voltas Ltd. share price target

Voltas (VOLT) 4QFY17 result was a beat on all counts, with strong UCP revenue growth at ~28% and EMPS margins at 5.7% ( 250bps YoY). While EBITDA grew 23% YoY (Rs 2.2bn), a lower tax rate (tax refunds of earlier year) led to an APAT growth of 50% YoY to Rs 2.0bn.

A recent interaction with distributors of air-conditioners (ACs) gave us a fresh perspective on the industry, including the prevalent competition and demand environment for the summer. We came to understand that the buzz around LG?s low-priced inverter ACs is a bit hyped, as these are fitted with cheaper alloy condenser coils, which are not actively pushed by retailers.

Revenue grew by 22.6% to Rs. 1174.53 Cr in Q3FY17 when compared to the previous quarter. On the other hand, it fell by 6.72% when compared with Q3FY16.

Voltas (VOLT) 3QFY17 overall result was in line with estimates. However, on a segmental basis, EMP surprised with better margins (3.9% vs. -0.6% YoY) and UCP reported 5% decline in revenues led by demonetisation. Other income also stood higher at Rs 597mn ( 140% YoY) leading to APAT of Rs 802mn ( 44% YoY).

ICICI Securities Ltd | Retail Equity Research Voltas' Q3FY17 consolidated revenues declined ~6% YoY to ~| 1200 crore due to fall in revenue of all three segments EMPS, EPS and UCP by ~3%, ~28% and ~5% YoY, respectively. Fall in sales of the UCP division was mainly due to high base and negative impact of demonetisation in tier II and tier III cities. Further, EMPS segment revenue declined due to slow execution of new projects while lower sales of EPS division was on account of higher base (one-time gain...

Voltas 2QFY17 results were in line, led by 13.5% YoY growth in the UCP segment. EMP segment performance continued to be muted (revenues degrew 15% YoY, 1% EBIT margin). However management guided for improved performance in FY18E as it plans to close most legacy projects by FY17 end.

ICICI Securities Ltd | Retail Equity Research Voltas' Q2FY17 consolidated revenues de-grew ~6% YoY to ~| 982 crore mainly due to fall in revenue from EMPS and EPS segment by ~15% and ~22% YoY, respectively. However, ~14% YoY growth in UCP segment revenue (driven by festive demand) helped partly offset the decline in consolidated revenue. Further, while Voltas witnessed significant growth in secondary sales volumes (of cooling products) in Q1, Q2FY17 saw higher demand from channel partners,...

Voltas reported 7% YoY increase in PAT to Rs 721 mn(our est. Rs 730 mn). Unitary cooling division (45% of revenue) continued its steady performance (13% YoY revenue growth and 60 bps improvement in EBIT margin to 12%), which was offset by lackluster performance by MEP division (46% of revenue).

Voltas 1QFY17 results were ahead of our estimates led by all time high margins in the UCP segment (14.9%, 300bps YoY). Strong revenue growth, better mix and lower advertisement spend contributed to the superior performance. Consequently Voltas reported an EBITDA/APAT growth of 52/53% for 1QFY17.

Voltas reported a strong set of numbers for 1QFY2017. Top-line at Rs1,845cr is higher than our expectation and up 18.2% yoy, led by strong UCP segment sales. UCP segment impressed us with 28.9% yoy increase in revenue to Rs1,196cr (65% of overall 1QFY2017 revenues). EBITDA margins for the quarter expanded by 204bps yoy at 10.3%. With most..