Shares of this Tata Group stock under the ‘mid-cap’ category fell up to 9 percent in Wednesday’s trading session despite the company posting robust financials during the quarter ended March 2024. However, some concerns were raised after the company updated its market share numbers under the “Room Air Conditioners” (RAC) segment.
With a market capitalization of Rs 43,367.41 crores, the stocks of Voltas Limited, one of India’s largest air conditioning companies, opened their trading hour on Wednesday at Rs 1,281.40 and currently trades at Rs 1,310.65. In the past six months, the company’s stock has gained nearly 60 percent for its holders.
The company’s scrip witnessed an intra-day low price of Rs 1,261.65 exhibiting a dip of around 9 percent compared to the previous close of Rs 1,388.45 apiece. Such bearish share price movements are observed today even after the company successfully reported positive movements sequentially.
During the recent quarters, the company’s basic business parameters, viz, its operating revenues as well as after-tax profits, witnessed a jump in numbers with the former shifting up from Rs 2,626 crores during Q3FY24 to Rs 4,203 crores during Q4FY24, and the latter, during the same period, transitioned from net losses of Rs 28 crores to net profits of Rs 111 crores.
On a YoY basis, the abovementioned metrics reported movements in opposing directions with the former, on one end, moving up from Rs 2,957 crores during Q4FY23 to Rs 4,203 crores during Q4FY24, and the after-tax profits, on the other end, slipping from Rs 143 crores to Rs 111 crores.
Along with some dip in the YoY bottom-line numbers, the company’s market share, especially in the “Room Air Conditioners” (RAC) segment, has been declining causing a negative sentiment of retail investors around the company’s stock and thus the decline in share price today.
According to various reports, the company’s market share pertaining to its RAC segment dipped from 23.4 percent during FY22 to 21.6 percent during FY23. In the latest financial report published, the company, on a YTD basis, reported a market share of 18.7 percent as of March 2024 in its ‘Split and Window Air-conditioners’ segment.
Having a glance at the net profit margins of the company, the same has been on a downward move since the past three financial years, moving down from 7.80 percent during FY21, 7.76 percent during FY22, and directly slipping down to 2.70 percent during FY23.
Voltas Limited is an India-based company providing engineering solutions for ventilation, air conditioning, heating, refrigeration, and others. The company has three broad operating segments, viz, ‘Engineering Products and Services’, ‘Unitary Cooling Products for Comfort and Commercial use’, and ‘Electro-Mechanical Projects and Services’.
Written by Amit Madnani
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