Voltas - Aims To Retain Market Share, High Single-Digit Margins: Motilal Oswal

Motilal Oswal Report

Voltas Ltd. management in the Q1 FY25 earnings call indicated that it maintains its leadership position in the RAC segment, with a market share of 19.5% in Q1 FY25. It maintains margin guidance to be in the high single-digit, with continuing leadership position in the room AC segment. In EMPS, domestic business grew 50% YoY, whereas in international business, the UAE and Saudi Arabia continued to deliver healthy growth.

It also highlighted that in respect of claims pertaining to FY23, the arbitration was awarded in the company’s favor. However, the collection of the proceeds will take some time. Though the second quarter remains a lean period for cooling products, the start of the festival season would lead to a spurt in demand.

In our Q1 FY25 result update, we raised our earning per share estimates by 19%/4% for FY25/FY26, led by strong revenue growth and Q1 performance. We reiterate our 'Buy' rating on the stock with a target price of Rs 1,800 based on 50 times September 2026E earning per share for the unitary cooling product segment, 35 times September 26E earning per share for the PES and EMPS segments, and Rs 38/share for Voltbek.

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