HSBC is bullish on the stock. It has maintained a ‘buy’ rating on the stock expecting that the company’s unitary cooling products (UCP) division will witness a significant increase in profitability.

Voltas sold over 2 million air conditioners in FY24, which it said is the highest-ever sales of ACs by any brand in a financial year in India.

The Tata Group company recorded a 35 per cent sales growth to over two million units in FY24, on the back of consistent demand for cooling products during the year, coupled with a strong offline and online distribution network, and new innovative launches.

“The company achieved over 2 million AC units during this fiscal 2023-24, the highest ever sale of ACs by any brand in a financial year in India, with a volume growth of 35 per cent,” it added.

With these landmark sales, Voltas is “the first ever brand to achieve this extraordinary milestone in the Air Conditioning industry in India”, it said.

The Indian residential AC market is estimated to be around 10 million units in FY24 and is expected to grow to 11.5 million units this year. Even during the March quarter, when sales of compressor-based cooling products are low due to convenient temperatures: “Voltas registered a significant volume growth of 72 per cent in AC sales during Q4 FY24”.

The company claimed that with these sales numbers, “Voltas is the undisputed market leader and has maintained its number one position in the Room Air Conditioner category”. Its MD and CEO Pradeep Bakshi said: “We believe that our wide presence, focus on the emerging retail channels, excellent distribution network, strong brand equity and attractive consumer offers have helped us to achieve this significant milestone”.

HSBC is bullish on the stock. It has maintained a ‘buy’ rating on the stock expecting that the company’s unitary cooling products (UCP) division will witness a significant increase in profitability. The brokerage has increased target price to ₹1,350 per share from the previous target of ₹1,250. This a potential upside of 11% from the previous closing levels of ₹1,217 apiece on the BSE.

In its note, HSBC said the UCP segment of the Tata Group firm will experience a significant increase in profitability due to both, robust demand for the company’s products and a decrease in the costs of materials needed for production. The brokerage added that margin improvement for the UCP segment is likely to be a positive surprise for investors. 

source/content: businesstoday.in (headline edited)