Voltas Limited - Q2FY2023 Review

Voltas Limited reported net revenue of ₹1,768.36 crores for the quarter ended September 30, 2022, compared to ₹1,689.08 crores for September 30, 2021. Profit After Tax was ₹13.44 crores for the quarter ended September 30, 2022, compared to ₹142.76 crores during the corresponding quarter of the previous year, respectively.

Voltas Limited - Investment Summary

Voltas Limited - Overview

• In order to develop, produce, market, and maintain medical refrigeration and vaccine storage equipment including Ice lined Refrigerators, Vaccine Freezers, and Ultra-low temperature Freezers for the Indian market, Voltas Limited, A Tata Enterprise and Vestfrost Solutions have entered into a Technology License Agreement as on 14, November 2022.

• Through its Joint Venture in India and in equal partnership with Arcelik, Voltas recently debuted its line of Voltas Beko Home Appliances.

Voltas Limited - Quarterly Summary

Business

• A leading provider of engineering solutions, Voltas Limited specialises in projects and offers air conditioning solutions.

• Voltas Limited, a Tata Group company that was established in India in 1954, offers a variety of goods in addition to room air conditioners, including air coolers, air purifiers, water dispensers, water coolers, commercial refrigeration, and commercial air conditioning.

• With a reach of more than 25,000+ consumer touchpoints, Voltas, one of the top businesses in the Tata group, is the undisputed market leader in room air conditioners in India.

• Voltas operates in three main business segments:

  • Electro-Mechanical Projects and Services (EMPS):

    • The EMPS business offers technical solutions for MEP projects, HVAC applications, central air conditioning and refrigeration, and water management services in domestic and international markets.

  • Unitary Cooling Products for Comfort and Commercial use (UPBG):

    • The UPBG business markets ACs, air coolers, water coolers, and other commercial refrigeration products.

  • Engineering Products and Services (EPBG):

    • The EPBG business markets and trades in mining and construction equipment as well as textile machinery, besides providing after-sales services.

• Out of the total revenue, 62% has been generated from Unitary Cooling Products for Comfort and Commercial use, 32% from Electro-Mechanical Projects and Services, and 6% from Engineering Products and Services in FY 2022 compared to 57%, 39%, and 5% in FY 2021, respectively.

Voltas Limited - Revenue Trend

• Geographically contribution from India was 84%, from the Middle East was 16%, from Singapore was 0%, and from Others, 2% in FY 2022 compared to 76%, 22%, 0%, and 2% in FY 2021, respectively.

Voltas Limited - SWOT ANALYSIS

• Strength

  • Leader in terms of market share in cooling products segment.

  • Strong financial profile.

  • Diversified revenue stream

  • Strong market presence.

• Weakness

  • MFs have decreased their shareholding.

  • Insufficient use of shareholder funds.

  • Trading around a 52-week low.

  • Insufficient use of assets to generate profits.

• Opportunity

  • Improvement in construction activity.

  • PLI scheme will help the company to boost the Make-in-India moment.

  • Low penetration in India’s AC industry implies huge potential growth.

• Threat

  • Sluggish economy and exchange rate fluctuations.

  • An increase in the prices of raw materials could impact the profit of the company.

  • Increase in competition.

Voltas Limited - Ratio Analysis