HDFC Securities is bullish on Voltas has recommended buy rating on the stock with a target price of Rs 663 in its research report dated August 11, 2018.
HDFC Securities' research report on Voltas
Voltas’ reported a strong quarter with 6% primary growth in RAC during an erratic summer. RAC market (secondary level) declined by ~10% while Voltas was flat. Voltas’ channel inventory is at normal levels (60 days) which gives us bettervisibility in the upcoming quarter. It was encouraging to note that Voltas gained market share (23.5% share; up 130bps) when MNCs have raised their game (Daikin and LG). As stated earlier, we backed Voltas (market leader) to bounce backduring a tough period.
We increase our earnings by ~3% owing to strong performance in RAC in 1Q and consistent improvement in EMPS margin. We value based on SOTP, valuing EMPS/EPS/UCP at Jun-20 P/E at 17(15 earlier)/20/35x with TP of Rs 663 (Rs
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