Hold Voltas; target of Rs 1241: Prabhudas Lilladher

Prabhudas Lilladher's research report on Voltas

Voltas reported rev. growth of 42.1% YoY led by healthy growth across segments, UCP/EMPS/EPS grew by 44.2%/47.2%/9.8% YoY. While margins were lower than expectations due to losses in EMPS segment and margin contraction in EPS & UCP segment. VOLT has sustained its market share in RAC segment (YTD 18.7% vs 19%/19.2% Dec/Aug-23), buoyed by a strong summer season which led to robust volume growth (+72% YoY in Q4FY24). The company expected healthy vol. growth in RAC/UCP to continue in Q1FY25 being strong season. EMPS business expected healthy rev. growth on back of strong order book & execution in domestic project business. Positive EBIT is expected, with no provisions left from international business. Voltas Beko saw a volume growth of 53% in FY24, outperforming the industry.

Outlook

We estimate FY24-26E Revenue/EBITDA/PAT CAGR of 10.9%/53.1%/89.4%. We downward revise our FY25/26E earnings by 3.1%/1.4% with contraction in UCP/EPS margins. Maintain ‘HOLD’ at SOTP based revised TP of Rs1241 (Rs 1199 earlier).