The global brokerage firm UBS upgraded Voltas\’ rating from \’Neutral\’ to \’Buy\’, raising the target price to Rs 1800 from Rs 885 previously. This adjustment suggests an upside potential of 38% from the previous close of Rs 1300.
Following the UBS upgrade, Voltas shares surged by 5% to Rs 1,365 during Monday\’s trading session on the BSE.
\”We believe Voltas will surprise on market share in the room air conditioner (RAC) segment, reaching 23% in FY26E vs 19.5% for consensus. The VoltBek JV should also continue to gain market share, and boost profitability by breaking even in FY26E,\” UBS said in a report.
The global investment bank believes Voltas has successfully reworked its supply chain in the RAC segment, further optimizing its cost structure.
UBS suggested that matching Voltas\’ reduced costs would be challenging for recent new entrants, potentially leading to industry consolidation and market share gains for Voltas.
Regarding the VoltBek JV (Voltas white goods JV with Beko), UBS anticipates improving traction in market share, with a potential turnaround in the bottom line by FY26E. The brokerage expects incremental revenue of Rs 10,000 crore (60% of FY27E revenue) in the consumer electronics segment by FY27E.
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At 11:12 am, the stock was trading 4.6% higher at Rs 1,360 on the BSE. Year-to-date, the stock has surged nearly 40%, and over the past six months, it has recorded a gain of 66%.
In its Q4 business update earlier this April, Voltas reported a remarkable 35% surge in sales, exceeding two million units in FY24. This milestone positions Voltas as the first company in the domestic market to achieve such a feat. The performance was attributed to a consistent demand for cooling products during the year, coupled with a strong offline and online distribution network and new innovative launches, the Tata Group firm said in a statement.
\”Voltas Beko, the Home Appliances brand, also registered a volume growth of 52% in Q4 FY24; and also achieved the milestone of close to 2 Million Home Appliances (Refrigerators & Washing Machines) in FY24. Overall, 5 Million Consumer Products got sold to happy customers across the country by Voltas in FY24,\” the company said in a release.
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