Voltas Ltd. share price target

We attended Voltas’s analyst meet to gain deeper insight into its growth roadmap/demand environment. The management indicated a ~20– 25% decline in RAC secondary sales across players in Apr-May ’25, with a similar impact expected on primary sales, till inventory levels normalize.

Voltas delivered steady performance in Q4FY25, driven by impressive growth in the UCP segment and healthy margins. Voltas' Chennai RAC manufacturing facility's ramp-up is on track, enhancing supply chain efficiency in southern and western regions. The company's strategic plans, including new product launches and distribution network expansions, are poised to further bolster its market share. Operational efficiencies and optimised manufacturing capabilities would also contribute to the success. Currently, the stock trades at 42X 1-year blended forward PE valuations. However, a short summer and early onset of monsoon could impact...

We interacted with the management of Voltas (VOLT) to gain insights into the current demand trends, the company’s strategy amid challenging conditions, and segmental performance.

We downward revise our FY26/FY27E earnings estimate by 6.6%/7.8% factoring slow demand for RAC, cost pressure for key components like compressors and copper tube, no price hikes and slow ramp up of Chennai plant. Voltas Ltd (VOLT) reported volume growth in line with the industry in UCP segment and anticipates demand recovery in upcoming quarters from extended summers and support from In Shop demonstrator. UCP EBIT margins expanded due to the better product mix in Industrial coolers and high energy efficient rated products. VOLT market share has declined slightly in RAC...

investments. No major price hikes were announced as the company wants to focus on maintaining its market share. Voltas prioritizes volume growth and market share over immediate margin expansion. Voltbek is expected to achieve EBITDA breakeven by early FY26. We estimate revenue/EBITDA/PAT CAGR of 15.0%/19.5%/25.3% over FY25-27E. The stock is currently trading at...

We interacted with the management of Voltas (VOLT) to gain insights into current demand trends, as well as its views on compressors, margins, market share, and more. Management believes that current demand trends for RAC remain strong, and its focus will be on growing faster than its peers.

Topline grew 18% YoY in Q3; EBITDA margin expanded 530bps YoY fueled by better cost efficiencies

Voltas (VOLT)’s 3QFY25 EBITDA was largely in line with our estimate as higherthan-estimated revenue was offset by lower-than-estimated margin in UCP (5.9% v/s estimated 7.8%).

Voltbek, which is still in an investment mode, is likely to be value accretive from FY25, in our view. It has focussed on gaining volumes and market shares since its inception in FY18. We believe it will have market share of ~10% in its both the key categories i.e. refrigerators and washing machines in next couple of years.

Voltas’ UCP segment continued its strong performance, delivering 31% y/y revenue growth in Q2 and 56% y/y RAC volume growth in H1 FY25.

Voltas (VOLT)’s 2QFY25 earnings were above our estimates, led by higher than-estimated revenue/EBIT growth in the UCP segment and higher margin in the EMPS segment.

Voltas (VOLT)’s management in the 1QFY25 earnings call indicated that it maintains its leadership position in the RAC segment, with a market share of 19.5% in 1QFY25.

Topline surged 46.5% YoY in Q1; EBITDA margin expanded 310bps YoY, boosted by nationwide heatwave

Voltas (VOLT)’s 1QFY25 performance was above our estimates, led by higher-than-estimated revenue growth in the UCP and EMPS segments, and a profit in EMPS vs. our estimate of a loss.

Despite denting market share, VOLT notched sales of more than 2mn AC units

Key observations: (1) Unitary cooling products (UCP) segment has reported a strong 44.2% revenue growth (higher than Blue Star and Havells – Lloyd).

KECI: Good quarter, T&D to pull topline and margins; upgrade to BUY. ACEM: Cost savings key driver; upside priced in, retain HOLD. LPC: Stable margins; higher tax weighs on PAT. VOLT: Margins falter; domestic business promising. MPHL: Modest growth; BFSI yet to pick up. BRIT: Expect strong volume growth ahead. DRRD: Driven by North America; India continues to underperform