Voltas Shares Falls 9% After Q4 Net Profit Misses Street Estimates; Know Analysts Take

Shares of Voltas slipped 9 per cent to Rs 1,261.65 on the BSE in Wednesday’s intraday trade on profit booking after the company reported a disappointing set of earnings for the March quarter (Q4FY24).

Voltas reported a 22.75 per cent year-on-year (YoY) decline in consolidated net profit to Rs 110.64 crore in the March quarter while revenue rose about 42 per cent YoY to Rs 4,202.88 crore.

However, earnings with earnings before interest, taxes, depreciation, and amortisation (Ebitda) declined 13 per cent Y-o-Y to Rs 190 crore, due to continued higher losses in the EMPS segment.

The overall UCP segment revenue grew by 44 per cent Y-o-Y to Rs 2,955 crore on account of a better product mix enhancement approach.

The Domestic Projects business with a presence in MEP, water, electrical & solar has grown by 38 per cent Y-o-Y due to a healthy carry forward order book position. Timely execution, focus on certification, and other related project management initiatives have resulted in a robust bottom-line growth over the previous year.

The Domestic Projects continues to grow its order pad and retain a positive outlook given the increased infrastructure spending in the country, the company said.

What Do Analysts Say?

“The company’s UCP business is seeing robust revenue growth supported by favorable weather conditions and its strong presence in this segment. However, the margin missed our estimates. Further, continued higher losses in the EMPS segment dragged down overall performance,” Motilal Oswal said.

Nomura expects EBIT margins to inch up to 9.5%/10.5% in FY25F/26F. “However, in projects, high losses remain a concern, and we expect EBIT margins to improve to ~4% in FY25/26F, which can be at risk if provisions for international projects continue,” it said.

Macquarie has given a neutral rating with a target price of Rs 842 while Morgan Stanley has maintained an equal-weight call on the stock with a target price of Rs 1,160.

Nomura has also maintained a buy rating with a target price of Rs 1,450. Brokerages may update targets after the analyst concall scheduled later in the day today.