Reliance Securities
Voltas (Buy)
CMP: ₹589.55
Target: ₹681
Annual report of Voltas highlights focus on “Opportunities — Invest, Deliver and Grow”. It has launched several ‘Make in India’ initiatives and investing in manufacturing unit in Sanand for its JV Voltbek, Tirupati for ACs, air coolers and commercial refrigeration and in Waghodia (Gujarat) for higher tonnage commercial cooling products.
The unitary products segment, a cash cow for Voltas, is the best play on the structural growth opportunity in low AC penetration and hot weather climate in India. The company sold 12 lakh units in FY19 and maintained No 1 position in room AC segment with a market share of 23.7 per cent. Voltas is expanding into other consumer durable segments like air-coolers and now expanding into other durable segments by JV with Arcelik.
Outlook & valuation: Sustained market leadership in room AC segment and foray into other consumer durable segments continue to augur well for Voltas. We reiterate our ‘buy’ recommendation on the stock with a target price of ₹681, valuing it at 30 per cent of FY21E earnings.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.