Buy Voltas, target price Rs 1400: Anand Rathi

Anand Rathi has buy call on Voltas with a target price of Rs 1400. The current market price of Voltas Ltd. is Rs 1214.9.
Time period given by analyst is one year when Voltas Ltd. price can reach defined target.

Voltas Ltd., incorporated in the year 1954, is a Large Cap company (having a market cap of Rs 40166.10 Crore) operating in Consumer Durables sector.


Voltas Ltd. key Products/Revenue Segments include Electrical Goods, Contract Revenue, Sale of services, Other Operating Revenue and Scrap for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 1822.34 Crore, up 4.89 % from last quarter Total Income of Rs 1737.35 Crore and down -10.94 % from last year same quarter Total Income of Rs 2046.26 Crore. Company reported net profit after tax of Rs 128.56 Crore in latest quarter.

Investment Rationale
Post-Q3 FY22, the brokerage lowers FY22e-FY24e revenue/ EBITDA by an average 13%/3%. It now models 19%/40% CAGRs in revenue/net income over FY22-24, leading to the RoE expanding from 10% to 16%. It upgrades the stock to a Buy based on a sum-of-parts valuation of Rs1,400 (earlier TP Rs1,367, 43x FY24e EPS of Rs32). Risk. Slower pace of order inflows from government schemes pertaining to household water pipeline connections and rural electrification is the primary risk for the projects business.

Promoter/FII Holdings
Promoters held 30.3 per cent stake in the company as of 31-Dec-2021, while FIIs owned 24.42 per cent, DIIs 29.76 per cent.