Shares of Voltas have been sinking at the bourses ever since the company posted its earnings for the quarter ended March. Analysts at Kotak Securities think the stock is headed for more pain.
The Voltas Analyst: Analysts at Kotak Securities maintained the “sell” rating for the stock with a price target of ₹930. The target indicates an around 30% downside from the stock’s last closing price of ₹1,318.80.
The Voltas Thesis: The brokerage firm in its research note, pointed out that the company’s Electro-Mechanical Projects (EMP) segment posted another quarter of EBIT losses and the margins at the Unitary Cooling Products (UCP) segment were also disappointing. UCP’s EBIT margins decreased by 90 basis points year-on-year to 9.2%, while EMP continued to incur losses for the sixth consecutive quarter.
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While short-term demand prospects appear favourable, margins remain under pressure, with competitive challenges on the horizon, the analysts added. The brokerage said that it expects the Tata Group company earnings per share to grow by 226.2% in FY25E & 18.9% in FY26E.
In the March quarter, consolidated EBITDA declined by 13% year-on-year, 15% below Kotak’s estimates. Net profit witnessed a 19% year-on-year decline, much below Kotak and consensus estimates. However, the brokerage added that the company’s revenue for the quarter was 19% ahead of its expectations.
Price Action: Voltas’s share price was down 1.02% to trade at ₹1,305.35 in the early hours of trading on Thursday.
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