Voltas Ltd - Lower margins negate growth, Retain Accumulate - Emkay

Reco: ACCUMULATE
CMP: Rs 105
Target Price: Rs 121

- Ahead estimates - (1) Revenue up 20% yoy to Rs16.2 bn - led by UCP (2) EBITDA margins down 240 bps yoy (3) APAT up 8% yoy to Rs780 mn - aided by forex gains of Rs110 mn

- EMP segment meets expectations with 10% revenue growth and 4.5% EBIT margins. UCP surprises positively with gain in market share, but EBIT margins remain under pressure.

- Healthy order inflows at Rs7.7 bn (26% of FY13E target) and order book at Rs45.7 bn (1.4X revenues) - sustenance of order inflows crucial for maintaining our earnings estimates.

- Retain our earnings estimates. Reiterate positive bias in view of strong ROCE, net cash surplus status and strong balance sheet. Retain Accumulate with target of Rs121.

Source : Equity Bulls

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