Voltas shares jump 3% after Q4 net profit more than doubles; Macquarie flags upside risks

Voltas shares rose over 3 per cent on Thursday early morning trade, touching an intraday high of Rs 1,287.60 on the BSE after the Tata Group company posted a strong set of numbers for the March quarter. The air conditioning and cooling solutions major saw its Q4FY25 consolidated net profit more than double year-on-year to Rs 241 crore, up 108 per cent, as against Rs 116 crore in the same period last year.

While the bottomline impressed, revenue growth came in slightly below Street expectations. Revenue rose 13.4 per cent YoY to Rs 4,768 crore, compared to Rs 4,203 crore in Q4FY24. Total income was up 14 per cent to Rs 4,847 crore.

On the operational front, Voltas reported a healthy 74.6 per cent jump in EBITDA to Rs 332.8 crore, though still below estimates of Rs 354 crore. EBITDA margin improved significantly to 7 per cent from 4.5 per cent YoY, aided by cost control and improved realisations.

The Board has also recommended a dividend of Rs 7 per share for FY25, equivalent to 700 per cent on the face value of Re 1.

Brokerages stay cautious despite strong Q4

While Voltas’ performance looks impressive, global brokerage Macquarie has retained its ‘Outperform’ call with a target price of Rs 1,520, but warned that near-term upside may be capped. The firm flagged downside risks including a shorter-than-usual summer and weaker-than-expected April RAC (Room Air Conditioner) sales, which may impact second-half performance.

UCP segment revenue rose 17 per cent, though that was 4 per cent lower than Street estimates. However, EBIT margins from the segment came in better-than-expected at 10 per cent. Voltas’ overall market share stood at 19 per cent, up 20 basis points YoY, but still lower than what the Street anticipated.

Valuation and technical view

According to Trendlyne, the average target price for Voltas is Rs 1,548, implying an upside of around 24 per cent from current levels. Out of 36 analysts tracking the stock, the consensus rating is a ‘Buy’.

However, technically, the stock shows bearish signs. The Relative Strength Index (RSI) is at 42.2, while MACD remains negative at -34, below both the signal and center line. Voltas shares are also trading below all key moving averages, including 10-, 50- and 200-day SMAs, signalling continued resistance ahead.

Stock performance snapshot

Voltas shares have declined 32 per cent year-to-date, underperforming the broader market, but gained 55 per cent over two years. As of now, the company commands a market capitalisation of Rs 41,176 crore.

With cooling demand facing seasonal challenges, all eyes are on how the summer unfolds for Voltas in the quarters ahead.