Voltas Ltd, the Tata Group Air conditioning and engineering services firm, reported a 53.4% jump in its Q2FY27 net profit to Rs 52.6 crore from Rs 34.3 crore in the corresponding period last year.
The company's revenue in the September quarter grew 15.3% to Rs 2,707 crore from Rs 2,347 crore, year-on-year (YoY). Its Unitary Cooling Products (UCP) business posted 29% revenue growth during the quarter. The room air conditioner (RAC) business recorded 32% volume growth in Q2FY27.
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At the operational front, EBITDA jumped 82.2% to Rs 128.3 crore, while EBITDA margin expanded to 4.7% from 3%, YoY.
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However, analysts believe margin pressures and rising input costs remain concerns. Brokerages remain divided on the stock, with differing views on its recovery prospects and valuations.
Here's what brokerages said on Voltas Q2 results:
Goldman Sachs on Voltas
- Maintain Sell; Target Price at Rs 1,025
- Room AC market share gains strengthen leadership, but UCP margin recovery remains slower than expected
- Price increases lag cost inflation, while seasonal pricing contracts delay margin improvement
- Voltbek targets EBITDA breakeven in FY28; weak underlying profitability remains a concern
Jefferies on Voltas
- Maintain Buy; cut target price to Rs 1,445 from Rs 1,495
- Recent 5–7% price hikes expected to support margin recovery from Q3FY27
- Targets 4–6% long-term UCP EBIT margin, supported by market-share gains
- Expects 14% sales and 24% EBITDA CAGR through FY29; cuts FY27 EPS by 7%
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Goldman Sachs on Voltas
- Maintain Sell; Target price at Rs 1,025
- Room AC market share gains to 17.4% support growth, but margin recovery remains slower than expected
- Price hikes lag input inflation, with institutional channel contracts limiting near-term pass-through
- Weak underlying profitability and continued margin pressures remain key concerns
UBS on Voltas
- Maintain Buy; cut target price to Rs 1,350 from Rs 1,500
- Management expects margin recovery from Q3FY27 following additional price hikes
- Voltbek targets EBITDA breakeven in FY28; market-share gains remain encouraging
- Cuts FY27–29 EPS by 15%/14%/5% amid commodity inflation and weak underlying margins
CLSA on Voltas
- Maintain Hold; cut target price to Rs 1,080 from Rs 1,160
- Additional 5–7% price hikes in Q3FY27 expected to offset commodity inflation
- VoltBek targets EBITDA breakeven in FY28, while market-share gains remain the priority
- Cuts FY27–29 PAT estimates by 17–23% amid weak margins and JV losses
Nomura on Voltas
- Maintained Neutral rating
- Target price cut to Rs 1,199 from Rs 1,357
- Q2 revenue largely in line with estimates
- Believes current valuation is fair
- Prefers LG Electronics India over Voltas
- Rising competition could further delay margin recovery
Kotak Equities on Voltas
- Upgrade to Reduce from Sell; Target price revised to Rs 1,100
- Market-share gains remain the priority, with room AC share reaching 17.4%
- Additional 5–7% price hikes expected to fully offset raw-material inflation
- Lean channel inventory and strong demand support growth, although margins remain under pressure
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Disclaimer: The views and opinions expressed by the investment advisers on NDTV Profit are of their own and not of NDTV Profit. NDTV Profit advises users to consult with their own financial or investment adviser before taking any investment decision.
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