Emkay Global Financial has given Hold recommendation for Voltas with a target price of Rs. 1185 in its research report issued on Dec 08, 2021

Emkay Global Financial’s report on Voltas

As per our interaction with management, it is now pinning hopes on a strong summer season for RACs as the high base of Q3FY21 could restrict revenue growth in Q3FY22E. The prior-year quarter benefited from pent-up demand and channel inventory liquidation. In the last three quarters, the blended average price hike has been in the range of 12-15%, and a large part of it was reflected in Q2. Any incremental price increase would depend on commodity price movements. Order inflow in EMPS are expected to improve from Q4. Voltas is forming a compressor manufacturing JV with the aim of bringing in a strong tech partner, the financial aspects of the JV are still being worked out. The focus is on self-reliance and reducing OEM dependency via own manufacturing under the PLI scheme.


Management reiterated the EBIT margin guidance for UCP at 11-12%, with expectations for a gradual recovery of the project business’ margins. We maintain FY22-24 estimates and rate the stock as Hold, with an unchanged SoTP-based Dec’22 TP of Rs1,185.

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