VOLTAS reported strong yearly growth for the second quarter FY18 supported by higher PAT and controlled expenditure. Revenue stood at Rs. 10367 Mn for current quarter against Rs. 9815 Mn moving 6% up YOY. EBDITA for Q2 FY18 was reported at Rs. 1369 Mn compared to Rs. 1345 Mn same period previous year growing 2% YOY. PAT jumped to Rs. 954 Mn in the current September quarter against Rs. 782 Mn corresponding period previous year growing 22% YOY.
Voltas has reported weak sequential numbers in a traditionally weak September quarter, but yearly growth is strong with stable revenue, controlled expenditure and higher PAT. Voltas currently has market share of 23% in the room air conditioner market for September 2017. Engineering Products & Services degrew 11%, whereas Electro-Mechanical Projects & Services and Unitary cooling products grew 3% & 15% respectively in the current September quarter. We recommend BUY for the stock for medium term with target of Rs.725 with PE multiple of 35.38 x FY18E & 30.95x FY19E.
Click here to read the full reportSuhani Adilabadkar is a Research Analyst registered with SEBI ((INH200003240)) She has done PGDBA (Finance), MS (Finance) and a Fellowship from Insurance Institute of India. She maintains a blog where she publishes research reports across industries - oasisfundamentals.blogspot.in.
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