Result Update: Voltas Ltd - ACCUMULATE - TP Rs.648 - Kotak

Voltas delivered all-round good set of quarterly numbers. The company reported enhanced profitability in the MEP as well as the UCP segment. Profit numbers were higher than our estimates. Improvement in order book and sustained uptick in order intake is a positive for the MEP business.

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 quarter numbers, we are finetuning our earnings forecast and also our target price.

However, in view of modest upside, we maintain our ACCUMULATE rating (BUY on declines) on the stock with a revised target price of Rs 648 (prior target of Rs 610).

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.557.65 as compared to the previous close of Rs. 575.55. The total number of shares traded during the day was 177523 in over 2728 trades.

The stock hit an intraday high of Rs. 575.1 and intraday low of 555.75. The net turnover during the day was Rs. 100208948.

Source : Equity Bulls

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