Buy Voltas; target of Rs 1516: Prabhudas Lilladher

Prabhudas Lilladher's research report on Voltas

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 segment (YTD market share of 19% as on Mar’25 vs 19.5% as on Jun’24). Company has faced collection issues in its domestic project business and company is optimistic about the recovery in subsequent quarters.

Outlook

Voltas Beko saw volume growth of 56% FY25, with market share gain in refrigerators/washing machines/ Semi-Automatic Washing Machine at 5.3%/8.7%/15.3%. We estimate FY25-27E revenue/EBITDA/PAT CAGR of 15.7%/19.3%/20.8%. we revise SOTP-based TP to Rs1,516 (down from Rs1,593), implying PE of 41x FY27E earnings

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