The Life Insurance Corporation of India (LIC) has increased its stake in a Tata group stock, Voltas Limited, by buying an additional 2%. The insurance behemoth also referred to as a Domestic Institutional Investor (DII) said that it has acquired Voltas’ shares worth ₹ 634.50 crores through open market transactions during the period from August 10, 2022, to November 4, 2022.
Voltas Limited is engaged in the business of air conditioning, refrigeration, and electro-mechanical projects as an EPC (engineering, procurement and construction) contractor. It caters to the domestic as well as international market.
According to regulatory filings, the state-owned life insurer has increased its shareholding from 2,27,04,306 shares (equivalent to 6.862 per cent) to 2,93,95,224 (8.884 per cent) in Voltas.
Earlier last week, the Tata Group company reported muted September quarter earnings for the financial year 2022-23 (Q2FY23). Its consolidated revenue came in at ₹ 1770 crore, up 4 per cent year-on-year (YoY), while its gross margin contracted by 220 basis points YoY to 24.4 per cent mainly due to commodity cost pressures.
Further, the company incurred a one-off loss of ₹ 100 crore due to the unilateral termination of an overseas project by the contractor and the encashment of an underlying bank guarantee for the same.
Voltas’ shares were trading at ₹ 826.20 apiece on Wednesday. The company has a market capitalization of ₹ 27,682 crores and is a large-cap company. It has an ideal debt-to-equity ratio of 0.07. However, its shares are trading at a price-to-equity (P/E) ratio of 72.77, which is significantly higher than the industry P/E of 8.52, indicating that the stock might be undervalued.
Written by Simran Bafna
Disclaimer
The content in this news article is not investment advice. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
