Voltas To Focus On Volume, Market Share, Says ICICI Securities Maintaining 'Add' Rating On The Stock

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ICICI Securities Report

We attended Voltas Ltd.’s investor update webinar and note:

1. It is focusing on volume growth, and air conditioners are likely to report volume growth of 20-25% YoY in Q4 FY25 (our view).

2. There may be additional investments in brand building, additional salesmen and merchandisers which may impact margin in near term but these investments are DCF accretive.

3. Other sub-segments such as air cooler / commercial air conditioning are growing at ~80% / ~15% YoY.

4. India’s air conditioner industry is ~14 million whereas domestic capacity to manufacture compressors is ~8 million. Hence, there is high probability of relaxations in norms to import compressors. Voltas has largely done investments in sourcing of compressors and may not be affected more than industry in case of shortage of compressors in CY25.

5. It has made investments to expand distribution of Voltbek from 7,000 outlets in FY24 to 12,000 now (Voltas distribution: 30,000 outlets).

We trim FY26-27E earnings by 3.8-3.9% to factor in higher focus on volumes and likely impact on margins. We remain positive on Voltas and maintain Add.

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