Goldman Sachs has maintained a ‘Sell’ rating on Voltas, with a target price of ₹1,400, implying a 5.3% downside from the current market price of ₹1,478.
The brokerage noted that while the company’s topline saw a marginal beat, margins were significantly below estimates, primarily due to the UCP (Unitary Cooling Products) segment. Although UCP segment revenue grew 20% YoY, in line with expectations, segmental margins declined to 5.9%, reflecting heightened competitive intensity and Voltas’ aggressive efforts to retain market share.
The MEP (Mechanical, Electrical, and Plumbing) business continued its profit turnaround, contributing to PAT. However, the EPS (Electromechanical Projects & Services) business faced further headwinds, with revenue declining sharply alongside margin compression.
The performance of Beko, Voltas’ joint venture in home appliances, also remained a key concern. Despite 56% volume growth in 9M FY25 after six years of operations, the business continues to report EBIT losses, raising questions about its long-term profitability.
Goldman Sachs characterized Q3 as a soft quarter, with margin pressures and competitive headwinds weighing on overall financial performance. Investors are likely to monitor margin recovery and improvements in Voltas’ EPS and Beko businesses for future growth prospects.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Business Upturn is not liable for any losses arising from the use of this information.
