Result Update: (Voltas Ltd) - Accumulate - TP Rs.506 - Kotak

Voltas delivered all-round good set of quarterly numbers led by strong rebound in UCP revenues. Headline numbers were higher than our estimates due to improved performance of the UCP segment. Improvement in order book and sustained uptick in order intake is a positive for the MEP business.

Voltas is valued at 25.6x and 22.8x FY18 and FY19 earnings respectively. The Voltas stock has rallied strongly in last five months. We remain positive on the long term growth potential of the room AC industry. Voltas is the market leader and has a strong brand and distribution network in the industry. It is well positioned to ride the growth in the industry. Post the strong fourth quarter numbers, we are raising our earnings for FY18 and also our target price.

However, in view of modest upside, we maintain our Accumulate rating on the stock with a revised target price of Rs 506.

Risks include - Execution delays in ongoing MEP projects and benign weather conditions during the summer which is the peak season for the room AC segment.

Shares of VOLTAS LTD. was last trading in BSE at Rs.498.6 as compared to the previous close of Rs. 475.5. The total number of shares traded during the day was 640946 in over 12477 trades.

The stock hit an intraday high of Rs. 501.05 and intraday low of 470.9. The net turnover during the day was Rs. 316819906.

Source : Equity Bulls

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