Equity Alert
Brokerages wary on Voltas on high inventory, regulatory changes
This story was originally published at 08:44 IST on 22 September 2025
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Equity Alert: Brokerages wary on Voltas on high inventory, regulatory changes
MUMBAI--0829 IST--Most brokerages remained cautious on Voltas on expectations of a weak September quarter due to inventory challenges and low demand. The caution is despite the company reiterating its hopes for an improved second half of the financial year due to the cut in goods and service tax on multiple segments that the company is involved in.
"Voltas, in its pre-quarterly update, indicated Q2 momentum to be challenging given higher inventories in channel (two–three months currently) coupled with GST cut expectations that hurt momentum for past five weeks," Nuvama Institutional Equities said in a report. The trend of a fall in sales across key categories such as cooling products is likely to continue in Jul-Sept due to the high base of last year, the report said. "Given the weak season and upcoming BEE (Bureau of Energy Effeciency) change event from Jan. 1, we argue near-term looks painful for brands," it said.
However, demand is likely to pick up in the December quarter due to the upcoming festival season and GST rate cuts. "Notwithstanding near term, Voltas expects demand drivers such as higher disposable income, urbanisation and replacement demand to be intact and hence imply strong growth prospects over medium to long term," the brokerage added. It maintained a 'reduce' rating on the stock with a target price of INR 1,020. On Friday, the stock had closed 0.4% lower at INR 1,419.90 on the NSE.
Nomura Global Markets Research also noted similar points and maintained a wary outlook for the stock. "Management noted that in the room AC category, both primary and secondary demand remains severely impacted in 2QFY26, given elevated channel inventory (2-3 months), the extended monsoon season, and consumers deferring their purchases between 15 Aug and 22 Sep," the brokerage said.
The comany said new rating norms of the Bureau of Energy Efficiency will drive prices higher by 3-5% for three-star ACs and by more than 5% for five-star ACs. "In our view, despite an ~8% cut in AC prices on lower GST, elevated channel inventory may dampen primary sales channel build-up in 3QFY26F before new BEE ratings kick in from Jan-2026," the brokerage said. It expects the net benefit for consumers to be nominal by the March quarter and thus the demand to remain contingent on the upcoming summer season. It maintained a 'neutral' rating on the stock with a target price of INR 1,420. (Akash Mandal)
Equity Alert: Analysts see limited impact of H-1B visa fee change on IT cos
MUMBAI--0807 IST--Indian information technology companies may see slight impact on their financials after US President Donald Trump hiked H-1B visa application fee to $100,000, according to brokerages Nuvama Insitutional Equities and Emkay Global Financial Services. IT firms are likely to see an impact of around 50-150 basis points on their margins if they choose to continue to use their current workforce dependent on H-1B visas, Nuvama said in a report on Sunday.
However, the brokerage also expects the actual impact of the fee hike to be lower than the 50-150 basis points as they will now focus on only critical jobs when considering hiring on H-1B visa. Indian IT companies have reduced their reliance on the H-1B visas over the last decade and started hiring more local workforce from the US.
Emkay Global spoke on similar lines and expects the companies to manage the change with more local hiring in the US. "We do not foresee any immediate risks to earnings, though a potential inch-up in on site wage inflation due to increase in local hiring and the USD100,000 fee on new H1-B visas from the next-year lottery cycle would hit earnings in FY27," Emkay Global said in its report. The brokerage also said that the overall impact on IT companies is unlikely to be disruptive and as companies may use L1 visas as an alternative.
In case of continued usage of H-1B visas, IT firms may negotiate with their clients to share the higher costs which is likely to help ease margin pressure on the companies in the medium term, Nuvama said in its report. Information technology companies will have to pay $100,000 once in six years for an employee through H-1B visa, the brokerage said.
"We believe such an impact is unlikely to be disruptive for IT companies, though there may be a near-term overhang on stock prices as investors are likely to price-in the increased risks of protectionist measures," Emkay Global said. (P. Madhu Kumar)
Equity Alert: Mkt may open lower; IT cos under pressure on H-1B visa changes
MUMBAI--0805 IST--Benchmark indices are likely to open lower Monday and may move in a relatively narrow range after already gaining over 3% this month. Information technology stocks are likely to be under pressure after the US imposed a hefty fee for H-1B visa applications. However, analysts expect the downside in the overall market to be limited. The Nifty 50 is likely to move in a range of 25150-25450 points.
IT stocks are likely to open lower due to pressure over the new $100,000 fee on H-1B visas. "IT stocks may witness knee-jerk reaction on Monday and can open gap down with cut of 1-3%," Sunny Agrawal, head of research at SBICAPS Securities, was quoted by the Economic Times as saying. The American Depository Receipts of Infosys and Wipro fell as much as 4% overnight after the new fee was announced.
The new goods and services tax regime announced by Prime Minister Narendra Modi on Independence Day will come into effect from Monday. Trade talks between the US and India will be in focus, with Trade Minister Piyush Goyal scheduled to visit the US later in the day to discuss the proposed bilateral trade agreement. A favourable trade deal for India will be the next big trigger for the market, analysts said.
The September contract of the GIFT Nifty indicates a slower start for the market. At 0803 IST, the contract was at 25334.50 points, 21.50 points lower than its previous close. On Friday, the Nifty 50 had closed at 25327.05 points, down 96.55 points or 0.4%. The BSE Sensex ended at 82626.23 points, down 387.73 points or 0.5%.
Indices in the US had ended with slight gains Friday, with all three indices ending at fresh closing highs. Trading volumes rose to the highest levels since April amid a bull run in the market. Most Asian indices were higher in early trade Monday. (Akash Mandal)
Equity Alert: US indices hit record highs Fri; Apple up as iPhone sales begin
MUMBAI--0743 IST--Equity indices in the US notched record closing highs again on Friday. The S&P 500 and the Nasdaq Composite indices closed higher, gaining for three consecutive weeks, helped by the US Federal Reserve's move to cut lending rates Wednesday. Market participants focused on details of a call between leaders of the US and China, which US President Donald Trump described as "very productive."
The Nasdaq Composite closed over 0.7% higher and shares of Apple rose more than 3?ter the company's latest iPhone went on sale. JP Morgan raised the company's target price to $280 from $255, Reuters reported. The Dow Jones Industrial Average index closed 0.4% higher, marking two consecutive weeks of gains.
Among other gainers, shares of Oklo and Nano Nuclear Energy rose 21-29%. Shares of Paramount Skydance rose nearly 6?ter media reports laid out more details about the company's likely bid for Warner Bros. Discovery. Shares of Warner Bros. Discovery were up more than 3%.
Following are the closing levels of US indices Friday:
|
Index |
Level |
Change in % |
|
S&P 500 |
6664.36 |
0.49 |
|
NASDAQ Composite |
22631.48 |
0.72 |
|
Dow Jones Industrial Average |
46315.27 |
0.37 |
(Eshitva Prakash)
US$1 = INR 88.09
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
End
Edited by Avishek Dutta
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