2020-02-25-Voltas-Limited-CMP

Voltas Limited a part of Tata group is an air conditioning and engineering company. Its operations are classified under three major business segments: Unitary Products, Engineering Projects, and Engineering Products and Services. Unitary Products business deals with a wide variety of cooling appliances such as air conditioners (ACs), air coolers, and commercial refrigeration products.

 

Stock Details

Market Cap. (Cr.) 23770.76
Face Value 1.00
Equity (Cr.) 33.09
52 Wk. high/low 731.05/501.65
BSE Code 500575
NSE Code VOLTAS
Book Value (Rs) 123.69
Industry DIVERSIFIED

 

Share Holding Pattern %

Promoter

30.30
FIIs 11.83
Institutions 38.18
Non Promoter Corp. 2.04
Public & Others    

Government

17.25

0.41

Total 100.00

Key Highlights:

2020-02-25-Voltas-Limited-Price-Chart

  • The company continued to hold No 1 position in room air conditioner business with YTD market share of 24.3% despite stiff competition. This share reflects the anticipated acceleration of Inverter ACs, which now accounts for 43% of AC sales.
  • Profit after tax for the December quarter was higher by 13%, at Rs. 88 crores as compared to Rs. 78 crores in the previous year. Unitary Cooling Products (UCP) segment revenue in Q3 December 2019 increased by 14%, stood at Rs 601 crore as compared to Rs 526 crore in the corresponding quarter last year. Electro-Mechanical Projects and Services (EMPS) Segment EBIT was lower at Rs. 37 crores reflecting broader concerns in the project segment – mainly slow pace of project execution due to liquidity crisis. However strong order book of the Segment stood higher (40% YoY) at Rs. 7024 crores (including major orders booked in Water) as compared to Rs. 4994 crores in last year gives visibility of ramp up in project business in 1HFY21.
  • As part of the ‘Make in India’ initiative, Voltas Beko commenced production at a state of the art manufacturing facility spread over 60 acres at Sanand near Ahmedabad. The factory will roll-out home appliances like refrigerators and washing machines and will scale up annual production capacity to about 2.5 mln units in due course, from a current capacity of 1 mln units. In 9MFY20, the JV sold a total of 0.22mn units across Refrigerator, Washing Machine, Dish Washers and Microwave Ovens. JV losses moderated in 3Q to Rs180mn from Rs 300mn in last year with breakeven is expected by 2024-25
  • The rapid spread of the Coronavirus threatens to disrupt component supply chain from China as the lead time of shipment is 15-20 days. However Voltas is adequately covered with inventory for 4QFY20 and will be able to explore alternate sources such as Korea and Thailand.

Outlook:

Voltas holds No 1 position in room air conditioner business with YTD market share of 24.3%. Despite the stiff competition company reported a strong growth in UCP Segment with 14% increase in revenue in December quarter. Therefore one can accumulate between Rs.680-Rs.700 for the target price of Rs.880.

Note: Detailed Report will be updated soon on our website.


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