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Informist, Thursday, Jan. 29, 26

By Adhithya Aji

MUMBAI – Voltas Ltd. reported a double-digit on-year fall in its net profit for the December quarter, missing Street's view on the metric. A wide swing in costs related to change in inventories of finished goods, stock-in-trade and work-in-progress weighed on the bottom line of the company. The company reported a double-digit-on-year bottom-line fall for the third quarter in a row, missing analysts' estimates. 

The electrical goods manufacturer reported a consolidated net profit of INR 849.50 million for the reporting quarter, down nearly 36% on year from INR 1.32 billion reported in the year-ago quarter. Voltas failed to meet analysts' estimate of INR 865.36 million net profit. The top line of the company fell over 1% on year to INR 30.53 billion from INR 30.87 billion reported in the corresponding quarter a year ago. This was below the Street's expectation of INR 31.34 billion. 

However, sequentially, the net profit more than doubled on year and revenue was nearly 32% higher. The company had incurred a one-time cost of INR 264.90 million for the December quarter. This pertains to the impact of new labour codes that came into effect in November. 

The total income of the company fell over 1% to INR 31.20 billion. Other income fell over 17% on year to INR 488 million from 591 million last year. 

Voltas reported a total expenditure of INR 29.45 billion, up marginally. In this, the company reported INR 741.4 million pertaining to change in inventories of finished goods, stock-in-trade and work-in-progress, against an inventory gain of INR 5.19 billion reported in the year-ago quarter. The cost of raw materials fell over 21% on year to INR 17.28 billion. Purchases of stock-in-trade fell nearly 23% on year to INR 5.42 billion and employee benefits expense fell nearly 3% to INR 2.25 billion. 

In segments, unitary cooling products, the largest segment, reported a consolidated net profit of INR 19.24 billion, up nearly 9% on year. The revenue in the segment was anchored by the business in room air conditioners, driven by goods and services tax reduction along with proactive buying ahead of the bureau of energy efficiency rating transition, the company said in a press release. 

Voltbek, the company's joint venture with the Turkish manufacturer of household appliances, Arelik, delivered growth despite a relatively weak festive season. The growth was driven by sales in washing machines, refrigerators, and small domestic appliances, the company said. "This progress reflects improving brand traction and deeper market penetration across key categories," as per the release.  

Electro-mechanical projects and services segment sales fell over 18% on year to INR 9.74 billion. The segment comprises both domestic and international projects. The domestic projects business sustained growth execution momentum while securing new orders across mechanical, electrical, and plumping, electrical and solar, and water segments, Voltas said in the press release. International business demonstrated resilience despite challenging order environment, as per the release.   

The revenue from engineering products and services was at INR 1.57 billion, up nearly 21%. "Mining and Construction Equipment delivered a steady and dependable performance during the period, reflecting stable demand and consistent execution," Voltas said.  

"With refreshed product line-ups, sharper pricing architecture, and focused cost optimisation, Voltas is entering the upcoming season with heightened readiness, stronger execution capability, and a more efficient operating base," said Mukundan Menon C.P., managing director of Voltas, in a press release.

For Apr-Dec, the consolidated net profit of the company fell nearly 57% to INR 2.60 billion. The revenue of the company fell over 12% to INR 93.57 billion. 

The company detailed the December quarter earnings post market hours Thursday. The shares closed nearly 2% lower at INR 1,349.10 on the NSE.  End 

Edited by Deepshikha Bhardwaj

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