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Voltas shares gain 10% on 12.5% rise in Q4FY20 net profit

Voltas shares gain 10% on 12.5% rise in Q4FY20 net profit

Voltas shares gain 10% on 12.5% rise in Q4FY20 net profit
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By Ankit Gohel  Jun 1, 2020 11:26:49 AM IST (Updated)

Shares of consumer durables major Voltas surged 10 percent in the early trade on Monday after the company’s fourth-quarter earnings beat analysts’ estimates with profit and margin led higher by Unitary cooling Products Segment.

Shares of Voltas surged 10 percent in the early trade on Monday after the consumer durables major company’s fourth-quarter earnings beat analysts’ estimates with profit and margin led higher by Unitary Cooling Products Segment. The stock surged 10 percent to intraday high of Rs 528 apiece on the BSE. At  10:20 am, shares traded 8.89 percent higher at Rs 522.65.

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The company posted a 12.5 percent rise in its consolidated net profit for Q4FY20 at Rs 159.5 crore against Rs 141.74 crore in the same period last year.
Revenue from operations during the quarter rose 1.3 percent to Rs 2,089.63 crore from Rs 2062.84 crore, YoY. Cooling products segment revenue increased by 20 percent to Rs 1,199 crores as compared to Rs 998 crores in the corresponding quarter last year. This was despite substantial business loss in March 2020, which is the beginning of the peak season (summer) and year-end billings.
Jefferies maintained a 'buy' call on the stock with a price target of Rs 615 apiece. The brokerage believes that results would be viewed favorably by investors esp. in the context of the negative COVID-19 impact on results declared by other industrial companies and a comparable peer Blue Star.
The management focus has always been on monetising sales which reflects in the balance sheet. However, inventory days are up 25 percent YoY, which possibly reflects lack of dealer stocking opportunity end March 2020 as the lockdown began on March 25, Jefferies said.
Morgan Stanley maintains an 'equal-weight' stance with a target price at Rs 519 per share. The brokerage noted that AC market share YTD improved to 24.2 percent from 23.9 percent in Q4FY19.
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