The investment advisor sees long-term upside in Voltas due to rising demand and expansion tailwinds, but risks remain.

Voltas is well-positioned for long-term growth, driven by strong demand, B2B tailwinds, and capacity expansion, making it an attractive pick, though the stockā€™s high valuations warrant caution, said SEBI-registered investment adviser Cashvisory India.

The stock trades at a high valuation, with a P/E (price-to-earnings) ratio of 52.

Voltas has reported a 24% increase in FY25 revenue at ā‚¹15,737 crore, while profit after tax (PAT) soared 236% to ā‚¹834 crore, the highest in their history.

The strong performance was driven by its Unitary Cooling Products (UCP) segment, which includes air conditioners and coolers.

The UCP business reported a 30% increase in revenue, boosted by the Room Air Conditioner (RAC) category, which commands around 19% market share.

A higher share of its premium products and the ramp-up at its Chennai plant helped the UCP segment achieve margins of around 10%, the investment advisor noted.

Voltasā€™ Projects business made a strong turnaround, posting a ā‚¹169 crore profit compared to a ā‚¹328 crore loss last year. This was backed by an order book exceeding ā‚¹6,500 crore.

Meanwhile, Voltas Beko recorded 57% volume growth and climbed to the no. 2 position in the semi-automatic washing machine segment.

However, the investment advisor said that challenges remain despite Voltasā€™ favorable numbers.

The investment advisor said the RAC segment is currently under short-term pressure due to a delayed summer and intensifying competition from over 60 brands. 

Commercial refrigeration has also been affected by weak capex trends and inventory corrections.

Data on Stocktwits shows that retail sentiment turned ā€˜bearishā€™ a week ago. 

Voltas sentiment and message volume as of 02:39 pm IST on June 17 | Source: Stocktwits

At the time of writing, the Voltas shares were up around 0.7% at ā‚¹1,320. Year-to-date, the stock has shed 26.4%.

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