Analysts expect Voltas to turn profitable in Q3

Voltas is going to declare its results for the third quarter of financial year 2012-13 on Monday. Analysts on an average expect the company to turn profitable with consolidated net at Rs 47 crore in the quarter as against loss of Rs 115 crore in a year ago period, according to CNBC-TV18 poll.

Consolidated total income is seen going up by 2.7 percent to Rs 1,196 crore from Rs 1,165 crore during the same period.
According to analysts, moderate revenue growth is expected to be driven by unitary cooling products (UCP) segment. They expect revenues to remain flattish also due to lower order backlog in the electro-mechanical projects (EMP) segment.
However, earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to fall by 27.3 percent YoY to Rs 63.5 crore in the third quarter.
EBITDA margin is seen declining by 220 basis points to 5.3 percent in October-December quarter led by higher costs and execution of low margin orders.
Margin of EMP segments are likely to be under pressure as the incremental revenue booked in Sidra and few other projects at cost.
Though in the UCP segment, Voltas has been able to grow faster than the market, margins are likely to be under pressure due to competition.
Investors should watch out for Sidra project status, outlook for order inflows (order intake especially Middle East), EMP margins and UCP business growth. Also Read
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