Voltas Q3 Results Review - UCP’s Performance In Line; EMPS Drags Profits: Motilal Oswal

Motilal Oswal Report

Voltas Ltd.'s Q3 FY24 performance was below our estimate, mainly due to higher losses in the electro-mechanical projects and services segment (loss of Rs 1.2 billion versus estimated loss of Rs 269 million). Ebitda missed our estimates by 75%, despite revenue coming in 8% above our estimate.

Voltas reported a net loss of Rs 304 million versus. adjusted. Profit after tax of Rs 270 million in Q3 FY23. The unitary cooling product segment’s revenue and Ebit were 6-7% above estimates; though the margin came in line at 8.3%.

Room AC volumes grew 27% YoY, surpassing the industry growth of 20-22%, and its FY24 year-to-date market share stands at 19%. The management expects demand for RAC, commercial refrigerators, air coolers, and home refrigerators to improve in the upcoming summer season.

This, along with positive consumer sentiments, should support growth. Management believes that there is scope to improve the UCP segment’s margin by 50-60 basis points.

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