Voltas shares drop 9% as margins disappoint across segments

The company's Unitary Cooling Products (UCP) business continued to outperform the market and maintained its growth momentum. While the overall volumes grew by 27%, the YoY growth for air-conditioners was even higher at 35%. continues to be a both in Split and Window Air-conditioners with a YTD market share of 18.7% as at March 2024.

The and services division clocked revenue of Rs 156 crore as compared to Rs 142 crore in the year-ago period.

Similarly, the and services segment comprising both domestic and international projects businesses grew by 38% YoY due to a healthy carry forward order book position, Voltas said.

"The company’s is seeing robust 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," said.

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.

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