Voltas Ltd. share price target

Consolidated revenue growth of ~33% YoY was much ahead of our estimates led by 40%, 26% and 46% UCP, electro mechanical project and services (EMPS) and engineering products & services division (EPS), respectively. The strong revenue growth in the EMPS segment was largely driven by execution of international orders amid improved labour availability and access to project sites. Further, in the process of restructuring its business under B2B and B2C categories separately, the board has approved transfer of its domestic project business to its wholly owned subsidiary...

Voltas (VOLT) reported exceptional performance again in Q3FY21.

VOLT management remained cautiously optimistic on the upcoming summer season sales given commodity cost inflation and resulting price hikes. However, the management remains confident of growing faster than the RAC industry while maintaining margins led by 1) wide distribution reach (c.19,000 touchpoints) 2) strong brand recall 3) supply chain efficiencies and 4) calibrated price increases. VOLT maintained its RAC market leadership with 26% share and is likely to gain from Govt's thrust on atma-nirbhar initiative in Room AC. MEP segment continued to improve sequentially while focusing...

VOLT's 3QFY21 earnings were 31% better than our expectation, led by betterthan-expected execution in the EMP segment, strong volume growth in the UCP segment, with ongoing cost rationalization leading to higher margin. It has retained its numero uno position in Inverter Air Conditioners/Room Air Conditioners (RAC) with a market share of 21.8%/26% in Dec'20. Share of Inverter ACs now constitutes 60% of RAC sales (v/s 49% in 3QFY20). With a rise in commodity prices, the management has undertaken a 5-6% price increase across the UCP segment, with COVID-related cost cuts providing a cushion to margin. We believe the risk to margin exists in this highly...

With volume recovery in both UCP and EMP in upcoming quarters, we expect the topline to improve gradually. However, focus remains on the firm's ability to control costs in order to recoup margins. Hence we...

Voltas' (VOLT) 2QFY21 earnings were 37% better than our expectation, largely led by better-than-expected execution in the EMP segment and higher margins in the UCP segment. VOLT has sustained its no.1 position in Room Air conditioners (RAC) and further improved its market share to 26.8% in Aug'20 (YTD 26.4%). Inventory level with the company stood at ~110 days, which is higher than normal, but should normalize by Dec'20-Jan'21. On the recent restructuring of business announcement, management was clear that the exercise is not aimed at selling off/demerger of the projects business....

Voltas Q1FY21 results came broadly ahead of estimates (Revenue/EBIDTA beat: 26.6%/31.2%)

Voltas lost almost 40 days of sales due to lockdown and reported ~51% YoY fall in revenue in Q1FY21. Revenues from UCP, electro-mechanical projects (EMPS) and engineering & product services declined ~60%, 37% and ~36%, respectively. The drag on EMPS business was largely on account of slow execution of international and domestic orders amid strict government regulations. Despite a strong order book of | 7663 crore, the lockdown situation may impact the pace of execution, job closures, thereby resulting...

Lockdowns in the past several months have taken away a large portion of peak summer sales and the same would lead to a double industry volume decline in FY21Country-wide lockdown for the first half of the quarter led to a complete washout of sales, and it was only by the 3rd week of May that industry could resume a semblance of activity. Quick and nimble to respond, Voltas managed to grab the opportunity and sold over 3.4 lack units of Unitary cooling products in a window of 45 days, thereby maintaining its leadership with 26.9% market share as on June as per third party research....

We increase our FY21, FY22 & FY23 earnings by 10.6%, 7.5% and 10.3% given 1) sustained market share gains in Room AC 2) encouraging response to Voltas-Beko portfolio in first season and 3) Sufficient forward visibility in MEP with strong order book (Rs77bn) led by domestic operations Even with lockdown disrupting peak summer season sales, VOLT continued to outperform the industry by reporting a 45% decline in RAC volumes vs 49% of industry on the back of 1) wide distribution reach (19,000 touchpoints) 2) heat-wave in the month of May and 3) strong brand recall. In MEP, although...