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HDFC Securities Report
Voltas Ltd.'s Q1 FY21 was slightly ahead of expectations as revenue/Ebitda declined by 52/77% YoY (our estimate 59/84%).
Unitary cooling products (UCP) posted a revenue decline of 60% YoY (in-line) with room air conditioner (RAC) volume dip of 45% YoY (industry 49% dip).
The company retained its market leadership (also in inverter) in RAC with market share expanding to 26.2%.
Ebit margin was robust at 15.5% (our estimate 9.5%), led by product mix and cost-saving.
Electromechanical project space (EMPS) revenue exceeded expectations, although increased provisioning and slow pace of execution led to the higher than-expected loss.
The company's performance in challenging times reinforces our long-term view.
Market leadership in under penetrated RAC along with an entry in large home appliances gives multi-year growth visibility.
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