Voltas - Near Term Cost Headwinds To Keep Margins Under Check: Nirmal Bang

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Nirmal Bang Report.We hosted the management of Voltas Ltd. at our conference. Their commentary was quite bullish on the RAC space.RAC volume for May grew by 100% YoY. For FY25, the management expects to clock in ~2.5 million units, and installed RAC capacity is expected to move up to 3.5 million by FY26-end. The Chennai plant is expected to start operations in early H1 FY25. The management expects full cost absorption of the Chennai plant owing to the large scale of operations + logistic cost savings due to shipment to South India from the Chennai plant. Long term vision of Voltas is to become a one-stop solution for all consumer durable products. A write back in the EMPS provisioning done for the projects in Qatar could be a possibility in the medium term (one-two years’ timeframe). We maintain Accumulate with a revised SOTP-based target price of Rs 1,340 valuing it at 45 times on FY26E earnings per share. While volumes are expected to be strong in the near term, the rise in costs of raw material + sea freight charges + ocean containers are expected to keep margins under check..Click on the attachment to read the full report:.Blue Star - Disciplined Pricing To Ensure Margin Protection: Nirmal Bang.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Voltas - Near Term Cost Headwinds To Keep Margins Under Check: Nirmal Bang

Increasing scale of operations to bring in margin expansion

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