HSBC maintains buy on Voltas, raises target price to Rs 735

HSBC has maintained a buy rating on Voltas and raised target price in the long term to Rs 735 from Rs 720. Shares of Voltas ended up 5.1% at Rs 684.20 on Thursday while the BSE sensex closed 634.61 points (1.55%) up at 41,452.35.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 1415.02 crore, down -46.54 % from last quarter sales of Rs 2646.67 crore and up .02 % from last year same quarter sales of Rs 1414.70 crore. The company has reported net profit after tax of Rs 116.43 crore in the latest quarter.


The company’s top management includes Mr.Anil George, Mr.Arun Kumar Adhikari, Mr.Bahram N Vakil, Mr.D Sarangi, Mr.Hemant Bhargava, Mr.Noel N Tata, Mr.Pradeep Bakshi, Mr.V Deshpande, Mr.Zubin S Dubash, Ms.Anjali Bansal. Company has S R B C & Co. LLP as its auditors. As on 30-09-2019, the company has a total of 330,884,740 shares outstanding.

Investment Rationale

Despite a strong base of 2019, HSBC expects the room air conditioner industry to post double-digit growth in 2020 with Voltas outperforming the industry. Recent reports of a likely increase in the competitive intensity from Samsung has weighed on Voltas’ share price but HSBC sees only a limited challenge to Voltas’ market share and profitability as its margins are not very high.