2025-05-02 09:25:17
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Research
Voltas Ltd Q1FY21 Result - Positive surprise on all fronts - YES SECURITIES
Posted On : 2020-08-15 12:25:30( TIMEZONE : IST )
Mr. Tarang Bhanushali, Lead Analyst - Institutional Equities, YES SECURITIES
- Voltas Q1 performance was better than our estimate led by a beat in its UCP and EPS segments
- Unitary cooling products (UCP) business revenues were higher than our estimate led by faster recovery in its key areas (North India). EBIT margin of 15.5% was quite higher than our estimate. We believe this would have been possible by a sharp cut in A&P expense and lower input costs. The company has gained market share during the quarter, increasing its share to 26.2% YTD from 24.2% in FY20. Voltas was able to sell
- around 0.29mn units of RACs
- Electro-Mechanical Projects and Services (EMPS) segment performance weaker than expected. We believe the higher than expected loss at EBIT levels was due to provisions for delayed payments and slower execution.
- Capital employed in UCP business increased sequentially. We are negatively surprise by the increase in capital employed by this business. Capital employed in EMPS business remained flat.
- Operating margin of 5.1% in Q1 was quite higher than our estimate led by strong EBIT margins registered in UCP.
- Loss from JV (Volt Beko) was lower than estimate. Commissioning of new plant aided to the outperformance in this JV.
- We will revise our estimates post the earnings call on Monday. We would maintain our negative view on the company as we believe rising costs and heightened competition would keep margins under check. Valuations at 30.7x FY22E P/E largely discount the sharp rebound expected in the RAC sector in FY22. We maintain our reduce rating on the stock.
- Earnings call on Monday, 17th August at 16:00PM (022 62801317/022 71158218)
Shares of VOLTAS LTD. was last trading in BSE at Rs.611.35 as compared to the previous close of Rs. 618.5. The total number of shares traded during the day was 190514 in over 5064 trades.
The stock hit an intraday high of Rs. 631.5 and intraday low of 603.8. The net turnover during the day was Rs. 117541856.
