Voltas' third quarter consolidated profit after tax is seen falling 5.2 percent year-on-year to Rs 58.7 crore, according to a CNBC-TV18 poll.
Total income of the air conditioning company is expected to decline 0.8 percent to Rs 1,110 crore during October-December quarter from Rs 1,119 crore in same quarter last fiscal.
Operating profit may climb 8.4 percent year-on-year to Rs 73.2 crore and margin may expand 60 basis points to 6.6 percent in the quarter gone by.
Revenues may by & large remain flat in Q3 because October-December quarter is a weak season for the AC product business.
The modest revenue growth may be be on account of:-Continuation of a Y-o-Y decline in electro-mechanical projects (MEP) segment’s sales (52 percent of sales) led by weak order flow growth in the past & execution issues being faced at certain projects-Expected continuation of a Y-o-Y decline in its engineering products (EPS) segment as demand for construction & mining equipments continues to be weak-EMP performance could break even at the EBIT Level led by higher proportion of higher margin orders-Margins could expand at a modest pace due to improvement in mix of UCP sales (although the company will have to battle high base of 13 percent)
What could negatively impact the results?-Slower pace of project execution continues to be a challenge, as revenue from project segment declined 16 percent Y-o-Y for H1FY15-Legacy projects are yet to be commissioned What could positively impact the results?-Q3 Results could surprise as the company could possibly book an exceptional income of Rs 236 crore as it books proceeds of the Thane land (7 acres) sale in Q3 to an Indiabulls Group company Key factors to watch out for in Q3 results:-Margin outlook for EMP segment, outlook for order inflows in this division-Execution of orders won in the Middle East-Signs of any stress in the EMP business due to falling oil price. Sharp decline in crude prices has raised apprehensions over the pace of order awards and also execution in Middle East-Sustainability of high margin and growth in the consumer durable segment
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