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    Navratri Special from Religare Broking: Voltas can rally over 30% in next 9-12 months

    Synopsis

    Voltas is the market leader in the room air conditioner category with a market share of 24.1 per cent as on June 22. The Indian AC market, valued at Rs 193 billion, is expected to register double-digit growth over FY21-26 given the under penetration of ACs in India (4% v/s global average of 30%).

    Navratri Special from Religare Broking: Voltas can rally over 30% in next 9-12 monthsAgencies
    Navratri is already here, and we know how important and auspicious the next few days are, signifying festivities across India. Religare Broking will share a fresh stock idea for the next eight days for long-term investors:

    Day 2: Voltas
    • Target: Rs 1,149
    • LTP: Rs 882
    • Upside: 30.27%

    Voltas, part of a multinational conglomerate Tata group, is India’s leading air conditioning company with a strong presence in unitary cooling products, engineering projects, and engineering products and services.

    It is the market leader in the room air conditioner category with a market share of 24.1 per cent as on June 22. The Indian AC market, valued at Rs 193 billion, is expected to register double-digit growth over FY21-26 given the under penetration of ACs in India (4% v/s global average of 30%).

    Moreover, increasing affordability, rapid urbanization, and changing lifestyles are key long-term structural growth drivers.

    The government’s PLI scheme in white goods would also propel growth for domestic manufacturing companies and reduce import dependence.

    Voltas would be the biggest beneficiary of positive industry growth trends and we expect it to maintain its leadership in the room AC segment on the back of its strong brand connect, pan-India distribution presence, and strong product portfolio.

    The company offers a wide range of products including air coolers, water dispensers, water coolers, commercial refrigeration and commercial air-conditioning products.

    Given the under penetration of the aforementioned products coupled with partner Arcelik’s robust R&D and Voltas’ strong distribution network, it would help the company to grow faster than the industry.

    The management has targeted 10 per cent market share in the home appliances market by 2025. Factoring this, we expect Revenue/EBITDA/PAT to grow at a CAGR of 16%/22.6%/26.7% over FY22-24E.

    We recommend a Buy rating on the stock with a target price of Rs. 1,149, an upside of over 30 per cent from Rs 882 recorded on 26 September.

    (Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)



    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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