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Dolat Capital Report
Voltas Ltd. Q1 FY25 results beat our estimates. Unitary cooling product seg. grew 51% with vol growth of 67%. Electro mechanical project grew 40% YoY and turned profitable (7.1% in Q1) after six consecutive quarters of operating losses-which was encouraging. Management guided for 4-5% EMP margins for FY25E.
Total C/F order book stood resilient at Rs 75 billion with 64% domestic business orders (Rs 48 billion). Order book is expected to pick up in H2 FY25, providing healthy revenue visibility.
During the quarter, RAC market share improved by ~80 basis points to 19.5% (YTD June 2024) , amid intense competition. Management maintained high single digit margin guidance for UCP segment for FY25E.
We have increased our FY25/26E earning per share by 30/11% to Rs 28/34 resp. Given recent run-up in stock price, we maintain ‘Reduce' rating with revised target price of Rs 1,570 (46 times FY26E earning per share, in line with Blue Star).
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