Voltas Navigating Headwinds; A Slow Start To FY26, Says HDFC Securities Maintaining 'Buy'

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HDFC Securities Institutional Equities

We attended Voltas Ltd.'s analyst group meeting on June 17 2025. Management noted a ~20-25% YoY room Air Conditioner volume decline across both the industry and company in April and May, due to the early monsoon onset. June has shown some recovery in some parts of the northern market.

Current channel inventory remains high at 6-8 weeks for the company. Despite weak demand, prices have remained stable, although the industry is offering free installation and other incentives.

The Electro-Mechanical Projects and Services is exercising caution regarding its international business, anticipating that growth in this region will take time.

While domestic EMPS business is expected to register slow growth in FY26, it is expected to pick up in FY27. Beko JV has recorded growth in Q1 FY26 to date.

The company is focused on gaining market share and reducing losses, aiming to contain Beko Ebitdam at -5% in FY26.

We model a CAGR of 10% for revenue, 15% for Ebitda, and 17% for adjusted profit after tax over FY25-27E.

We maintain Buy on Voltas with a lower SOTP target price of Rs 1,420/share (~40x Mar-27E EPS).

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