Motilal Oswal has come out with its second quarter (July-September) earnings estimates for the capital goods sector. The brokerage house expects Voltas to report a 58.7 percent degrowth quarter-on-quarter (growth of 6.9 percent year-on-year) in net profit at Rs 45.3 crore.
Sales are expected to decrease by 38.1 percent Q-o-Q (up 0.7 percent Y-o-Y) to Rs 1088 crore, according to Motilal Oswal.
Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to fall by 61.3 percent Q-o-Q (up 18 percent Y-o-Y) to Rs 51 crore.
Motilal Oswal on Voltas:
Of the INR22b of domestic order book, INR12b have margins at threshold levels of 4-5 percent. In International, of the INR16b order book, INR10b are at 4-5 percent margins. Legacy projects will continue to impact reported margins, as recent project wins will take time to cross the margin recognition threshold. Most of the low margin jobs in the international market are likely to be completed by end-FY15.
Inquiry levels have seen an improvement, both in domestic and overseas markets. Though bidding level continues to be aggressive.
Textiles and Construction/Mining equipments are showing initial signs of a demand improvement, and could lead to strong traction in Engineering Products business.
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