Dolat Capital's research report on Voltas
In Q1FY20, Voltas reported results that were in-line with our expectations, adjusted for one-off. The results were driven by strong growth in the UCP division, which rose 47% YoY, due to a good summer—a fact corroborated by competitors and channel checks. While project business was down, we do not read too much into it and expect the business to remain steady on a full year basis. The company’s balance sheet is improving with negative capital employed in the UCP segment, reversing the WC expansion seen in Q4FY19. We continue to like the structural penetration story of ACs and believe Voltas is the best way to play this.
Outlook
We maintain our Buy rating, valuing it at 29x for FY21E with a TP of `690.
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