Earnings review: Voltas shares drop over 9% on weak Q4 results; should you still buy?

The steadfast reported a 22.75 percent driblet successful its consolidated nett net astatine ₹110.64 crore for Q4FY24 arsenic against ₹143.23 crore successful the corresponding play past twelvemonth connected the backmost of higher expenses. Meanwhile, the aerial conditioning and engineering services provider's gross from operations successful the 4th nether reappraisal roseate 42 percent to ₹4,203 crore from ₹2,957 crore successful the year-ago period.

The full expenses successful the 4th fourth came successful astatine ₹4,044.90 crore versus ₹2,761.45 crore successful the corresponding play a twelvemonth ago. On the operating front, the location appliances shaper recorded a 340 ground constituent sequential driblet successful its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin.

Read here: Q4 Results Impact: IGL banal jumps 7% aft PAT rises 9% successful March quarter

The banal fell arsenic overmuch arsenic 9.1 percent to its day's debased of ₹1,261.65. Despite today's fall, the scrip is inactive implicit 69 percent supra its 52-week debased of ₹745, deed connected July 14, 2023. Meanwhile, it has declined astir 16 percent from its grounds precocious of ₹1,500, deed earlier this period connected May 2, 2024.

The banal has jumped implicit 72 percent successful the past 1 twelvemonth and implicit 29 percent successful 2024 YTD.

Overall, for the fiscal ended March 31, 2024 (FY24), the consolidated nett net soared implicit 82 percent to ₹248.11 crore from ₹136.22 crore successful the erstwhile year. Meanwhile, its consolidated gross from operations accrued by 31.4 percent successful FY24 to ₹12,481.21 crore, compared to ₹9,498.77 crore successful FY23.

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Voltas besides said that its committee of directors has recommended a dividend of 550 percent astatine ₹5 per stock of the look worth of Re 1 per stock for FY24 upon the support of shareholders. "The directors person recommended a dividend of ₹5 per stock connected the look worth of Re 1 per stock (550 percent) for the twelvemonth 2023-24 which shall beryllium paid connected oregon aft the 5th time from the decision of the 70th Annual General Meeting, taxable to the support of shareholders of the company," it informed successful a regulatory filing.

Q4 Results Review

Following the merchandise of Q4 earnings, respective brokerage firms person shared their outlook connected Voltas. Nomura has maintained a ‘buy’ telephone connected Voltas with a people terms of ₹1,450 per share, reflecting a affirmative presumption for the company's aboriginal show and a 15 percent upside.

Nomura expects EBIT margins to inch up to 9.5 percent/10.5 percent successful FY25F/26F. "However, successful projects, precocious losses stay a concern, and we expect EBIT margins to amended to ~4 percent successful FY25/26F, which tin beryllium astatine hazard if provisions for planetary projects continue," it cautioned.

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In contrast, Morgan Stanley has kept an ‘equal-weight’ standing with a people of ₹1,160 per share, suggesting a much neutral stance and an 8 percent downside.

Macquarie has besides continued with a neutral standing and acceptable a people terms of ₹842 per share, implying an implicit 33 percent downside. The brokerage's enactment pointed retired respective cardinal concerns, including an all-around borderline miss successful Q4 and underwhelming UCP (unitary cooling products) margins contempt the spot of seasonal demand. Additionally, the enactment highlighted a flimsy marketplace stock loss, arsenic FY24 year-to-date RAC (room aerial conditioner) marketplace stock stood astatine 18.5 percent compared to 19 percent successful December 2023, indicating a imaginable situation for the company.

Disclaimer: The views and recommendations made supra are those of idiosyncratic analysts oregon broking companies, and not of Mint. We counsel investors to cheque with certified experts earlier taking immoderate concern decisions.

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Published: 08 May 2024, 12:42 PM IST