Shares of Voltas Ltd. plunged 9% on Wednesday after its fourth-quarter profit declined by nearly 23%, missing analysts' estimates.
The air conditioner maker's net profit declined to Rs 110.6 crore in the quarter ended March 2024, according to an exchange filing. That compares with the Rs 208 crore consensus estimates of analysts polled by Bloomberg.
The stock was trading 6.2% lower at Rs 1,302 apiece on the NSE, compared to the 0.09% decline in the benchmark Nifty 50 at 10:10 a.m.
Voltas Q4 Results Highlights (Consolidated, YoY)
Revenue up 42.1% to Rs 4,203 crore (Bloomberg estimate: Rs 3,828 crore).
Ebitda declined 12.6% to Rs 190.6 crore (Bloomberg estimate: Rs 261 crore).
Ebitda margin down 284 basis points at 4.5% (Bloomberg estimate: 6.8%).
Net profit down 22.8% at Rs 110.6 crore (Bloomberg estimate: Rs 208 crore).
The board also announced a dividend of Rs 5.5 per share.
Key Levels To Watch
Resistance level: Rs 1,502 (Life High)
Support level: Rs 1,262 (Today's Low)
Key Highlights
Voltas Ltd. sold over 2 million air conditioners in the financial year 2023-24 which is the "highest-ever" sales of ACs by any brand in a financial year in India.
The Tata Group company posted a significant volume growth of 72% in AC sales in the fourth quarter and 35% for fiscal 2024.
Street Views
Nomura
Nomura maintains a 'buy' rating on Voltas and maintained its target price of Rs 1,450 apiece, indicating an upside of 4.4% to the previous close.
While margins disappointed across segments, it expects Voltas to outperform the Unitary Cooling Products segment's revenue to grow at 20% and 15% year-on-year in FY25e and FY26e, respectively. This growth will mainly be driven by a better product mix and forecasted industry volume growth.
On the other hand, the project segment's high losses remain a concern, impacted by recovery delays in international projects in Qatar.
UBS
UBS also maintains a 'buy' rating on Voltas with a target price of Rs 1,800 apiece, implying a 30% upside to the previous close.
The brokerage suggests that despite having an operating leverage benefit, the room air conditioner product category margins declined 90 basis points year-on-year.
Furthermore, it believes that the market share trend in the first quarter of FY25 should begin to improve. The UCP segment margins will also continue to see gradual improvement.
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