Buy Voltas; target of Rs 1230: Motilal Oswal

Motilal Oswal is bullish on Voltas recommended buy rating on the stock with a target price of Rs 1230 in its research report dated January 31, 2024.

Broker Research

February 07, 2024 / 19:04 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on Voltas

Voltas (VOLT)'s 3QFY24 performance was below our estimate, mainly due to higher losses in the EMPS segment (loss of INR1.2b vs. estimated loss of INR269m). EBITDA missed our estimates by 75%, despite revenue coming in 8% above our estimate. The company reported a net loss of INR304m vs. adj. PAT of INR270m in 3QFY23. The UCP segment’s revenue and EBIT were 6-7% above estimates; though the margin came in line at 8.3%. RAC volumes grew 27% YoY, surpassing the industry growth of 20-22%, and its FY24YTD market share stands at 19%. The management expects demand for RAC, commercial refrigerators, air coolers, and home refrigerators to improve in the upcoming summer season. This, along with positive consumer sentiments, should support growth. Management believes that there is scope to improve the UCP segment’s margin by 50-60bp.

Outlook

We cut our EPS estimates by 42%/14 for FY24/FY25, considering higher losses in the EMPS segment. We note that losses in the EMPS segment are recoverable as the company has undertaken legal routes. Reiterate BUY with a TP of INR1,230 (valuing UCP business at 45x and EMPS/PES business at 25x FY26E EPS, and assigning INR38/share for Voltbek).

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