Add Voltas, target price Rs 925: HDFC Securities

HDFC Securities has add call on Voltas with a target price of Rs 925.The current market price of Voltas is Rs 840.95.

Voltas, incorporated in the year 1954, is a Large Cap company (having a market cap of Rs 27777.77 Crore) operating in Consumer Durables sector.

Voltas key Products/Revenue Segments include Electrical Goods, Contract Revenue, Sale of services, Other Operating Revenue and Scrap for the year ending 31-Mar-2022.


Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 2036.27 Crore, up 11.11 % from last quarter Total Income of Rs 1832.74 Crore and up 11.74 % from last year same quarter Total Income of Rs 1822.34 Crore. Company has reported net profit after tax of Rs -77.87 Crore in latest quarter.

The company’s top management includes Mr.Noel N Tata, Mr.Zubin S Dubash, Mr.Arun Kumar Adhikari, Ms.Anjali Bansal, Mr.Bahram N Vakil, Mr.Hemant Bhargava, Mr.D Sarangi, Mr.V Deshpande, Mr.Pradeep Bakshi, Mr.Saurabh Agrawal. Company has S R B C & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 33 Crore shares outstanding.

Investment Rationale
With stable RM and no price hike in the near term, the UCP EBIT margin can improve sequentially if healthy demand sustains. The brokerage slashes its FY23/24/25 EPS estimates by 18/6/6% to factor in weak profitability of EMPS (~5% value in our SoTP). Our SoTP (UCP/EMPS/EPS P/E at 38/15/15x and Volt-Beko P/S of 4x) on Dec-24 derives a TP of INR 925.

Promoter/FII Holdings
Promoters held 30.3 per cent stake in the company as of 31-Dec-2022, while FIIs owned 21.58 per cent, DIIs 30.99 per cent.