Voltas Limited, a Tata group stock, opened at Rs 777.90 on Wednesday only to decline by more than 3 percent during the day to reach a new 52-week low of Rs 751.80. The scrip ended the session at Rs 756. 

Voltas Limited, a Tata group company, is engaged in the business of air conditioning, refrigeration, and electro-mechanical projects as an EPC contractor both in domestic and international geographies. It is the largest air conditioning company in India. 

The stock has been on a downward trend and has shed approximately 25 percent in the last six months. The decline can be attributed to the weak demand for Air Conditioners in the Winter season. The price hike of goods caused by inflationary fears has added to the slump. 

The company is yet to declare its Q3 results. In Q2FY23, the company reported a total revenue of Rs 1,768.36 Crore which was an increase from Rs 1,689.08 Crore in the same period the year earlier. However, their net profit declined to Rs 22.87 Crore from Rs 123.18 Crore in Q2FY22. 

Prabhudas Lilladher has a ‘Buy’ call on Voltas Limited and has assigned a target of Rs 1,030 per share for the long term which represents an upside of 36% from the current levels. 

“We are positive on the company for the long term given the leadership position in high potential RAC segment, balance sheet comfort (Rs 8.6bn net cash H1FY23), and better traction in order flow from domestic as well as an international side in EMPS segment,” the brokerage highlighted. 

However, near-term challenges related to demand and margins are expected to continue due to price competition, high-cost inventory & demand slowdown in the UCP segment, and a slowdown in order flow from the international side, it added. 

Written by Anoushka Roy


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