The household appliances sector in India is experiencing robust growth, with the market reaching approximately USD 77.74 billion in 2024 and projected to grow at a CAGR of 5.7%, reaching USD 135.33 billion by 2034. Key drivers include rising disposable incomes, urbanization, and demand for smart appliances like refrigerators and air conditioners.
Price movement
With a market capitalization of Rs 48,606.97 crore, the shares of Voltas Ltd were trading at Rs 1,469.00 per share, decreasing around 1.70 percent as compared to the previous closing price of Rs 1,494.45 apiece.
Matter Explanation
Voltas anticipates strong demand this summer despite last year’s high base. From April 2024 to January 2025, India’s AC industry grew over 30%, while Voltas outperformed with 35%+ growth. The company remains confident in sustaining its market leadership and continuing to exceed industry growth rates.
Voltas, in an analyst meeting, emphasized profit expansion via value engineering over price hikes. Despite rising production costs, it hasn’t raised prices like its peers. The company secured compressors for summer demand. Room AC sales remained strong in Q4, while Commercial AC is projected to grow at 15-18 percent CAGR.
Analyst Comments
Despite record-warm temperatures boosting Voltas Ltd.’s volume growth prospects, HSBC cut its target price over margin concerns and rising costs. HSBC and Investec maintained ‘hold’ ratings, while UBS ( Rs 2,200) and Citi ( Rs 1,850) kept ‘buy’ ratings. Nomura stayed ‘neutral’ at Rs 1,404.
Additionally, HSBC predicts summer will drive volume growth over margin recovery. Investec warns margin pressure may persist due to rising production costs, currency depreciation, and competition. Citi notes Voltas prioritizes volume growth and market share over margins, despite headwinds from higher compressor costs, currency fluctuations, and increased copper prices.
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Segment Performance
Voltbek Home Appliances reported strong volume growth, with market share gains in washing machines and refrigerators, targeting EBITDA breakeven. Engineering Products & Services saw slight revenue growth but declining profits, with mining performing well but facing margin pressures in job renewals.
Unitary Cooling Products led with 20 percent YoY growth in Q3, despite margin impacts from currency depreciation and high commodity prices. Commercial Refrigeration faced moderate growth due to reduced capex, while Electro-Mechanical Projects turned profitable with strong order execution and a Rs 4,862 crore order book.
Capex Plans
The company has earmarked Rs 400-450 crores for capex, focusing on compressor manufacturing and expanding production at its Chennai factory. Of this, Rs 250 crores is allocated for compressor-related investments, contingent on technological partnerships, to enhance capacity and strengthen its manufacturing capabilities.
Outlook and Guidance
The company expects strong demand in the upcoming summer season, with optimism across all business segments. Management anticipates easing pressures from new factory ramp-up and inventory liquidation in commercial refrigeration. UCP segment margins are projected to stay in the high-single-digit range.
Company profile
Voltas Limited is an India-based air conditioning and engineering solutions provider and a projects specialist. The Company’s segments include Unitary Cooling Products, Electro-Mechanical Projects and Services, and Engineering Products and Services.
Written by Abhishek Singh
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