Earnings Outlook
Channel restocking, mkt share gain to boost Voltas earnings
This story was originally published at 21:00 IST on 28 January 2025
Register to read our real-time news.Informist, Tuesday, Jan. 28, 2025
By Steffy Maria Paul
MUMBAI – Voltas Ltd.'s December quarter earnings may help it emerge amongst the outperformers in the electronic goods manufacturing sector, analysts said. Channel restocking on expectations of a strong summer season and market share gains are expected to have driven Voltas' earnings during the December quarter.
For the December quarter, the home appliances company is seen clocking a consolidated net profit of INR 1.61 billion, according to an average of estimates from 10 brokerages. The company had posted a loss of INR 304.10 million in the year-ago quarter. The estimates for net profit range from INR 1.44 billion by Anand Rathi Share and Stock Brokers Ltd. to INR 1.82 billion by Kotak Institutional Equities.
Voltas' net sales are expected to rise 14.5% to INR 30.07 billion for the latest quarter, the average of estimates showed. The lowest estimate for the top line was INR 28.34 billion by Motilal Oswal Financial Services Ltd. and the highest was INR 31.86 billion by Kotak Institutional Equities. Sequentially, the net profit is seen rising 20% and net sales increasing 15%.
YES Securities expects improved execution, a healthy order book in the electro-mechanical projects and services segment, and continued market share gains in the room air conditioner segment to drive Voltas' revenue in the latest quarter. Voltas gained market share during the quarter on account of its aggressive pricing and promotion strategies, Kotak Institutional Equities said in its earnings preview.
Kotak Institutional Equities expects the company's unitary cooling products segment's revenue to grow 30% on year during the quarter. However, Nuvama Institutional Equities and Prabhudas Lilladher expect the segment to grow 25% and 17.5% on year respectively. The segment's earnings before interest and tax margin is expected to contract 50 basis points on year to 7.8% on account of long-term incentive schemes and price hikes lagging higher raw material inflation, Kotak Institutional Equities said. The volumes of air conditioners are likely to have remained strong during the quarter, rising 35% on year, indicating continued market share gains, Nomura Equity Research said.
Kotak Institutional Equities expects the engineering products and services and electro-mechanical projects and services segments to grow 9% and 10% respectively during the quarter. However, brokerage Motilal Oswal expects the electro-mechanical projects and services segment's revenue to fall 2% on year. Revenue from the projects business is likely to be flat on year due to lower order wins, Nomura said. The brokerage expects the segment to report an EBIT margin of 4.5%. Prabhudas Lilladher expects Voltas Beko, a 50:50 joint venture between Voltas and Arcelik, to remain loss-making during the December quarter.
The company is expected to report earnings before interest, tax, depreciation, and amortisation of INR 2.08 billion for the December quarter, according to the average of estimates from nine brokerages. The EBITDA is expected to be in the range of INR 1.80 billion to INR 2.54 billion.
The electronic goods maker will detail its earnings for the December quarter on Wednesday. On Tuesday, shares of the company closed at INR 1,430.95 on the National Stock Exchange, up 0.9%. The stock has fallen over 16% since it reported its September quarter earnings. Of the 13 brokerage reports on the company available with Informist, seven have a 'buy' or equivalent rating, four have 'hold' or equivalent rating, and two have 'sell' or equivalent ratings.
Following are the Oct-Dec earnings estimates for Voltas based on reports from 10 brokerage firms in descending order of net profit estimate (in INR million):
| Brokerage Firm | Net Sales | Net Profit | EBITDA |
| Kotak Institutional Equities | 31,862.00 | 1,815.00 | 2,417.00 |
| Nomura Equity Research | 31,590.00 | 1,764.00 | 2,155.00 |
| Elara Securities (India) Pvt. Ltd. | 29,425.00 | 1,709.00 | 1,797.00 |
| JM Financial Institutional Securities Pvt. Ltd. | 30,414.00 | 1,666.00 | 2,048.00 |
| Nuvama Wealth Management Ltd. | 30,738.00 | 1,596.00 | 2,540.00 |
| YES Securities (India) Ltd. | 30,060.00 | 1,581.00 | 1,939.00 |
| Motilal Oswal Financial Services Ltd. | 28,336.00 | 1,532.00 | 1,890.00 |
| Nirmal Bang Equities Pvt. Ltd. | 29,050.00 | 1,496.00 | 2,060.00 |
| Prabhudas Lilladher Pvt. Ltd. | 29,056.00 | 1,465.00 | 1,831.00 |
| Anand Rathi Share and Stock Brokers Ltd. | 30,171.00 | 1,438.00 | -- |
| Average | 30,070.20 | 1,606.20 | 2,075.22 |
End
Edited by Saji George Titus
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