Voltas: Buy at CMP and add on dips till 324 for a short term time horizon

Dynamic Equities | Feb. 22, 2017, midnight

Voltas Limited “Beat the Heat”

Voltas Ltd, founded in 1954 and a part of the renowned TATA Group having  diversified business interests. It is India’s largest air conditioning company. The company offers engineering solutions for a wide spectrum of industries. The areas served are

1.    Heating,

2.    Ventilation And Air Conditioning,

3.    Refrigeration,

4.    Electro-Mechanical Projects,

5.    Textile Machinery,

6.    Mining And Construction Equipment,

7.    Water Management & Treatment,

8.    Cold Chain Solutions,

9.    Building Management Systems,


Voltas' operations have been organized into 3 independent business-specific clusters.

Electro-Mechanical Projects & Services

•    Electrical, Mechanical & Refrigeration Solutions

•    Electrical & Mechanical Solutions (international)

Engineering Products & Services

•    Textile Machinery

•    Mining & Construction Equipment

Unitary Cooling Products

•    Air Conditioners

•    Commercial Refrigeration

•    Water Coolers & Dispensers

The company’s manufacturing unit is located at Thane, Dadra and Pantnagar

Highlights of the Company

•    India’s leading business group in the private sector

•    India’s most respected brand across consumer segments

•    Total Income equivalent to 5.3% of India’s GDP

•    India’s largest foreign exchange earner in private sector

•    India’s largest private sector employer- 3,00,000 employees

•    Operations in over 80 countries

•    India’s Largest exporter of turnkey electro-mechanical projects for built environment

•    Largest customer base in the Indian air conditioning market

•    Synonymous with cooling appliances in India

•    “Veritas “ No.2 Brand in the Indian Air Conditioner Market

•    Largest Supplier of Textile Machinery in India

•    Trusted name in Mining and Construction Equipments

•    Premier marketing organization in Machine Tools

•    Pioneer in importing and marketing industrial chemicals


Recent Awards


•    Dun & Bradstreet Corporate Awards for Consumer Durables & Appliances Sector

•    Top Taxpayers' Award for Dept. of Central Excise & Service Tax

•    EFFIE Award (silver) for Effectiveness in Advertising,(Best On-going Campaign category) For room AC advertising

•    Tata Group's Excellence in Communications Award, Best Television Advertising For 'All-Weather' AC launch campaign


•    World Advertising Research Centre - Asia Awards, Gold Prize- For 'All-Weather' AC marketing

•    National Energy Conservation Award (AC category) - From Govt. of India Ministry of Power

•    'Man of Appliances' award - From Consumer Electronics & Appliances Manufacturers' Association

•    Won by VP & COO - Voltas Unitary Products Business Group

•    MEP Middle East Awards 2013- Sustainable GCC Project of the Year (for Al Bustan Utility Complex, Riyadh)


Q4fy16 Result Analysis

1.    Net Sales stood at 1875.72 in Q4FY16 vs 1301.14 in Q3FY16 growth of 44%

2.    Income from Operations  stood at 1888.76 in Q4FY16 vs 1307.78 in Q3FY16 growth of 44%

3.    Operating Profit  stood at 177.24 in Q4FY16 vs 51.51 in Q3FY16 growth of 244%

4.    PAT stood at 180.71 in Q4FY16 vs 56.09 in Q3FY16 growth of 222%

5.    EPS was at 5.33 vs 1.64

Annual Result Analysis

1.    Net Sales stood at 5831.83 in FY16 vs 5144.29 in FY15 growth of 13%

2.    Income from Operations  stood at 5857.44 in FY16 vs 5183.09 in FY15 growth of 13%

3.    Operating Profit  stood at 409.12 in FY16 vs 382 in FY15 growth of 7%

4.    PAT  stood at 392.13 in FY16 vs 386.03 in FY15 growth of 1.6%

5.    EPS was at 11.65 vs 11.62

The share price of Voltas Ltd is currently trading at 336 with a P/E of 28.58. The book value is 75.18 and the stock has made a 52 week high / low of 359.90 and 211 respectively. The market cap of the stock is 11030 crores.  The ratios for the stock are Current ratio 1.33, Quick ratio 0.99, Interest Coverage ratio 22.30, Debt Equity ratio 0.06, Return on Asset 9.79, Return on Equity 18.28, most of the ratio are favorable for the stock, one could buy the stock at 336 adding on dips till 324 for a potential target of 360 for a short term time horizon.

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