Buy Voltas, target price Rs 1434: ICICI Securities

ICICI Securities has buy call on Voltas with a target price of Rs 1434. The current market price of Voltas Ltd. is Rs 1207.05. Time period given by analyst is 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 39904.70 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 30-09-2021, the company reported a Consolidated Total Income of Rs 1737.35 Crore, down -6.60 % from last quarter Total Income of Rs 1860.17 Crore and up 5.24 % from last year same quarter Total Income of Rs 1650.80 Crore. Company reported net profit after tax of Rs 123.18 Crore in latest quarter.


Investment Rationale
During the quarter, Voltas showcased its ability to pass on high input costs to the customer while maintaining its leadership position in the RAC category. It has raised target multiple for UCP segment from 60x to 65x owing to strong revenue growth during the quarter. It values the consolidated business at Rs1,390 (51.7x FY23E earnings) and Voltbek at Rs44 (4x of investments) arriving at an SoTP-based target price of Rs1,434 (earlier: Rs1,217).

Promoter/FII Holdings
Promoters held 30.3 per cent stake in the company as of March 31, 2021, while FIIs held 14.4 per cent, DIIs 37.5 per cent and public and other 17.9 per cent.