Brokerage houses are split on their views on Voltas after the company’s Q4FY25 results came in below expectations, especially on the margin front, with challenges arising from weak cooling product demand and pressure in the engineering projects segment (EMP).
CLSA has maintained a ‘Hold’ rating with a target of ₹1,375, highlighting that earnings were below both CLSA and consensus estimates. The key issues were slower-than-expected growth in the cooling products (UCP) division and lower margins in the EMP business. While EMP revenue grew 4% YoY, it remained loss-making at the operating level, reflecting execution and cost challenges.
Additionally, Voltas’ exit market share in room air conditioners (RACs) slipped to 19%, down sequentially. With inventory levels rising due to an unusually cool April and unseasonal rainfall, CLSA flagged channel stock as a key monitorable for the June quarter. Their channel checks indicate muted industry growth in RAC volumes in April, which may weigh on Q1FY26 earnings as well.
On the other hand, Citi remains bullish, reiterating a ‘Buy’ rating with a target price of ₹1,850. The brokerage acknowledged that Q4 revenue, EBITDA, and profit growth of 13%, 63%, and 107% YoY respectively were below estimates, but attributed the margin shortfall largely to EMP segment weakness, rather than structural issues in the consumer business.
Citi emphasised that Voltas has maintained its leadership in the air conditioning segment, with UCP performance still healthy despite short-term weather-related challenges. It continues to see the company as one of the best-positioned plays in India’s growing RAC industry, given its distribution scale, brand equity, and product range.
Disclaimer: The above views are those of the respective brokerages and not the publication. Investors should consult a certified financial advisor before making investment decisions.
