Voltas, a major player in the Indian stock market, has been facing challenges in the RAC industry, but the company's management is looking forward to a gradual normalization in the coming quarters. With growth visibility improving into FY27, contingent on summer demand and cost improvement actions, Voltas is poised for a potential rally.
The company has been experiencing continued weakness in the RAC industry, elevated channel inventory, and sustained margin pressures in the near term. However, there are early signs of channel pre-stocking ahead of BEE norm change and medium-term growth levers across non-RAC cooling categories, EMPS and Engineering Products.
Voltas expects a revenue/EBITDA/PAT CAGR of 9.0%/9.9%/12.1% for FY25-28E, indicating a positive growth trajectory. The company's subsidiary, Voltbek, has continued to show growth momentum with market share gains across its key products.
The stock is currently trading at 47x/39x FY27/FY28E, and the target price has been tweaked to Rs1,415, implying a PE of 39x FY28E. With a 'HOLD' rating, investors are advised to keep a close eye on the stock's performance.
Remember, this is a perspective, not a prediction. It's essential to do your own research and consider your investment goals and risk tolerance before making any decisions.
Download the TradeKaizen app to practice F&O trading with real-time market data anytime, anywhere.
Get it on Google PlayConnect with fellow traders, share strategies, and improve your trading skills in our Telegram group.
Join Telegram