The shares of Voltas, a Tata Group company have fallen by 15.17% in the last five days. There was a major fall on Friday after it reported earnings below estimates for the quarter ended March 2022. Its share price declined 9.78% intraday to ₹ 1,045 apiece.
The air conditioning and engineering services company’s net profit tanked 23.46% to ₹182.71 crores in the March quarter, against a net profit of ₹ 238.72 crores during the same quarter last year. It reported a total income of ₹2703.78 crores, up 0.76% year on year (YoY) from ₹ 2683.24.
Further, Credit Suisse downgraded the stock to underperform and cut the target price to ₹ 975 from ₹ 1225 since the company’s performance is highly dependent on high-temperature weather. The company is in an intensely competitive category and has a relatively expensive sector valuation. The shares are currently trading at ₹ 978 levels, and have almost reached the target suggested by Credit Suisse.
ICICI Direct said that the company’s performance in the quarter was below estimates mainly due to a sharp fall in the revenue of its EMPS (Electro-mechanical project & services) division. However, the company’s UCP segment (Room air conditioner) revenue growth came in line with its estimate.
Voltas sold many air conditioners on the back of an intense heatwave in the country and a hybrid work model. They expect the management to hike the prices of the air conditioners and expect higher sales in the coming months. Further, the impact of these numbers might be seen in the upcoming Q1 results.
These brokerages suggest an upside as far as Voltas’ stock is concerned:
ICICI Direct: Hold
On 10th May 2022, ICICI Direct suggested a ‘hold call’ on the shares of Voltas, with a target price of ₹ 1120. The time period given by the analysts is one year. This translates to an upside of 14.52%.
Centrum Broking: Add
The brokerage has an ‘add call’ on the shares of Voltas. It has given a target price of ₹ 1115 apiece, achievable in one year. This indicates an upside of 14.01% as compared to its current market price.
Voltas Limited has given multibagger returns since they crashed in 2008. On 1st December 2008, the shares were trading at ₹ 46.22 apiece. Since then the shares have shown an increasing trend. They reached a high of ₹ 1356.90 last year, giving multibagger returns of 2835.74%. Investors who had invested ₹1,00,000 in the shares of the company at that point, would have holdings worth a whopping ₹29,35,740!
