Buy Voltas; target of Rs 1568: Anand Rathi

Anand Rathi's research report on Voltas

Hit by an erratic summer, Voltas’ UCP fell 25% y/y in Q1, its market share down to 17.8% (June-end 19.3%). Under-absorption and higher promotions squeezed margins, while inventory was high. Voltas Beko gained share but is still in investment mode, while Projects posted a stronger order book.

Outlook

Management expects Q2 weakness but sees recovery from Q3, with a longterm focus on market leadership, selective growth, and innovation. We retain a Buy, with a 12-mth TP of Rs1,568 (earlier Rs1,544).