Voltas; Profit Growth declines to 51.26 %; Should you invest ?
Air Conditioners- India
- In 2024, the revenue in the Air Conditioners market in India amounts to US 5.88bn. (Rs. 49,000 Crore)
- It is projected to grow annually by 16.56% (CAGR 2024-2029). So in 2029 AC market will reach to US 11.2 bn (Rs. 1.1 Lakh Crore)
- India’s air conditioner market is experiencing a surge in demand due to the country’s rising middle class and increasing urbanization.
- Looking ahead to 2029, the volume in the Air Conditioners market is expected to reach 22.9m pieces units.
Air Conditioner Market Share – India
Following in the post on compilation list of the best air conditioner brands in India. Among these companies Voltas leads with market share of 21 %
Voltas : Company Snapshots
- Voltas a Tata Brand, engaged in the business of air conditioning, refrigeration, electro – mechanical projects
- Voltas was created 6 decades ago when Tata Sons joined hands with a swiss company Volkart Brothers.
- Voltas Beko,a JV with a Turkish company Arçelik; produces refrigerators, washing machine, microwaves and dishwashers
- Company is also into Textile Machinery Division & Mining and Construction Equipment.
Revenue Breakup
- Unitary Cooling Products: 70%
- Electro-mechanical Projects: 26 %
- Engineering Products: 4%
Fundamental Analysis
Key Ratios
| Market Cap | ₹ 48,890 Cr. |
| Current Price | ₹ 1,478 |
| High/Low | ₹ 1,560 / 757 |
| Stock PE | 197 |
| Industry PE | 80.9 |
| ROCE | 8.51% |
| ROE | 4.40% |
| Sales | ₹ 12,481 Cr. |
| Debt To Equity | 0.13 |
Financial Trend
Revenue: 5 Year Comparison
- 2020: 7,658 crore
- 2024: 12,481 crore
- 5 Year Percentage change: 63.01%
Net Profit: 5 Year Comparison
- 2020: 517 crore
- 2024: 252 crore
- 5 Year Percentage change: (-51.26%)
Shareholding Pattern
Change in Shareholding Pattern
| Mar-23 | Jun-24 | 1 Year Change | |
| Promoters | 30.30% | 30.30% | 0.00% |
| FIIs | 20.58% | 15.08% | -5.50% |
| DIIs | 33.14% | 40.19% | 7.05% |
| Public | 15.78% | 14.22% | -1.56% |
FII- (Foreign Institutional Investors)
- FIIs have reduced their stake by 5.5%
- Analysis: The decline in the profit growth, this shows the FIIs lost faith in the Voltas, this decrease does not shows a good sign
DIIs (Domestic Institutional Investors)
- In the same time, DIIs have increased their stake by 7.05%
- Analysis: This shows a really great sign for the investors.
Stock Price Returns
1 Year Stock Returns
- Voltas has given 1 Year returns of 90.06 %
- 1 Lakh invested in July 2023 would have become 1.90 Lakhs in July 2024
5 Year Stock Returns
- Voltas has given 1 Year returns of 153.68 %
- 1 Lakh invested in July 2020 would have become 2.53 Lakhs in July 2024
Company Valuation
- Current PE- 197
- Median PE- 36.6
- Company is Overvalued: As the Current PE is greater than Median PE, so we can say that company is company is overvalued. Company’s valuation is almost 5.5 times to its Median Valuation.
Should you Invest ?
- With a market share of 21% in air conditioning, Voltas is the market leader.
- As the Current PE is 5.5 times to its Median PE of 10 years, as well as Current PE is 2x to its Industry PE, from this Voltas is overvalued at this point of time.
- Company’s Revenue growth is 63% which is decent but Net Profit growth is declined to 51% in last 5 years.
- If the company does not focus on increasing their profit growth then it is tough to maintain the share price at this PE level of 197
- At this point Voltas company’s fundamentals does not seems to be good to invest in the long run.
- At CMP of Rs. 1478, this is not the right time to but Voltas company shares as the company is not able to give consistent Profit Growth
Check Out this– How Blue Star is silently killing Voltas in Air conditioning ?
Disclaimer
- Money Minded School is not a SEBI registered investment advisor, Please do your own research before investing
- This article is a complete guide about Voltas Ltd.
- These information and forecasts are based on our analysis, research, company fundamentals and history, experiences, and various technical analyses.
- Also, We have talked in detail about the share’s future prospects and growth potential.
- Hopefully, this information will help you in your further investment.
- If you have any further queries, please comment below. We will be happy to answer all your questions.
- If you like this information, share the article with as many people as possible
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