- 14 Feb 2022
- ICICIdirect Research
Voltas reports soft performance amid challenging periodVOLTAS - 823 Change: 1.35 (0.16 %)
News: Voltas’ Q3FY22 revenues declined 10% YoY to Rs.1794 crore mainly due to 35% YoY drop in revenues of Electro mechanical and project division. However, Unitary cooling product division sales came in higher by 9% YoY to Rs.1094 crore. On the margin front, lower profitability from UCP segment was completely offset by higher profit from EMPS division which helped drive overall EBITDA margin up by 136 bps YoY to 8.7%. PAT came in lower by 25% YoY to 106 crore tracking lower sales and increased losses from joint ventures
Views: We believe despite a higher base (+67% YoY growth in Q3FY21) and low seasonal demand, the company’s UCP division sales growth of 9% is much better than our estimate. Voltas continues to be the market leader in the room AC segment with YTD (till November 2021) market share of 25.8%. We await management commentary on recovery in segment EBIT margin and future demand outlook.