VOLTAS Limited is India’s largest air conditioning company which offers a comprehensive range of cooling & home appliances including room air conditioners, air coolers, air purifiers, domestic refrigerators, washing machines, water dispensers, dishwasher, microwave, commercial refrigeration, and accessories. It is also engaged in the business of air conditioning, refrigeration, electro - mechanical projects as an EPC contractor both in domestic and international geographies (Middle East and Singapore) and engineering product services for mining, water management and treatment, construction Equipments and textile industry.

It is India’s NO.1 AC brand with highest market share of 21% market share in room Acs and 36% in window ACs. It has 25K+ customer touch points across the nation with the help of which it has successfully cooled 10 million + households through its products and 1 out of every 4 room AC and 1 out of every 3 commercial refrigerators sold in India is a Voltas product. It has 64 New RAC SKUs, 51 Voltas Fresh Air Coolers SKUs, 23 New Commercial Refrigeration SKUs and it has 4 manufacturing facilities at Waghodia (Gujarat), Sanand (Gujarat) and 2 at Pantnagar (Uttarakhand) with a manufacturing capacity (CAC) 5 lakh ton and (AC) 2.7 million units.

Company has also launched a range of Voltas Beko home appliances in partnership with Beko of Arçelik Group group owned by Koç Holding - a Fortune Global 500 company in Europe. Voltas Beko has 22 production facilities across 8 countries with 20 R&D and design centres innovating products through which it has achieved 150% growth and became the fastest growing home appliances brand in India and has sold over 3.3 million products through 7,000+ touchpoints and 150+ SKUs. Voltas Beko is the first brand in India to launch a 5-star rated washing machine and Beko is among the top 3 Large home Appliance brands in Europe along with servings in 135 countries.

Company’s Domestic projects business registered a stellar growth of 83% over last year in similar period, on the back of the healthy order book at the beginning of the year and timely execution of the projects. The order inflow and order pad for the domestic business stands at Rs. 482 crores and Rs. 5275 crores respectively. Recently it secured MEP-Major projects which includes Chennai Metro, Bangalore Metro, Data Centre Jobs (Noida), Godrej Commercial Building (Bangalore), Phoenix Equinox Commercial Complex (Hyderabad) etc. It has also completed Water Projects of SAIL, Bokaro & Rourkela and OWSSB Cuttack and delivered Solar EPC Project and secured orders for Water supply under Jal Jeevan Mission. It has installed 265 water treatment and distribution plants in the Madhepura (Bihar) and working on similar groundwater projects, to benefit 600 villages in UP.

Under its Textile Machinery Division (TMD) the company enjoys 65% Market share of spinning machinery. It also plans to grow market share in capital machines, in Spinning and Post Spinning. The company has added Spreading machines and weaving preparatory machines to its portfolio and plans to add Embroidery to strengthen value chain in Post Spinning.

Its Mining and Construction Equipment division has grown its business across India and expanded its reach to Mozambique through partnerships with Tata Mozambique and Tata Africa.

Making its entry into new segment, the company signed a technology license agreement with Vestfrost Solutions, Denmark, to develop, manufacture, sell and service medical refrigeration and vaccine storage equipment which will enable the company to enter the Bio Medical and Cold Chain industry for vaccine storage equipment such as ice-lined refrigerators, vaccine freezers, and ultralow temperature freezers, in the Indian market.

On International Operations front the company has successfully completed multiple projects across GCC, including Dubai, Oman, Qatar, Bahrain and the company has an order book of Rs.2,356crs. Company's WOS, UMPESL won multiple project orders valued at ~Rs. 3,762 crs, including a solar power project. Its IOBG segment bagged a project worth Rs. 942 crs in Riyadh, Saudi Arabia, for Qiddiya Water Theme Park along with multiple projects, including Jubail for HVAC division and the world’s largest desalinated water production plant.

Fundamentals:

Financial Results:

Company’s Net Sales was at Rs 1,587.50 crore in December 2023 up by 11.59% from Rs. 1,422.59 crore in December 2022. Its Quarterly Net Profit was at Rs. 97.33 crore in December 2023 up by 119.61% from Rs. 44.32 crore in December 2022. Its EBITDA stands at Rs. 143.43 crore in December 2023 up by 95.73% from Rs. 73.28 crore in December 2022. Voltas EPS has increased to Rs. 2.94 in December 2023 from Rs. 1.34 in December 2022.

Key Updates:

1. Voltas has launched its SmartAir Inverter AC series, offering a bundle of smart features and IoT capabilities which boasts lower noise levels, effortless temperature adjustments, and advanced functionalities accessible through the Voltas Smart Mobile App, available on both Google Play Store and iOS App Store. This new launch includes a total of 6 IoT enabled SKUs, of which 3 SKUs will be in the 5-Star Inverter Split AC and 3 in the 3-Star Inverter Split AC.
2. Voltas is going to launch its new range of 5-star Glass Top models and Hard Top Deep freezers & Convertible models, New Floor Standing Water Dispenser Models in the Spring Series with a choice of hot, normal, cold water. The Company is also expanding its Visi Cooler line-up with additions of 4 new models - Minibar 50 Lt, Large Single Door in 550 ltrs and two Large Double Door models in 750 & 1000 ltrs at this event in 2024.
3. Company also upgraded its 1.5-ton and 2-ton Fixed Speed Cassette ACs to 3-star Cassette Acs, extended the product portfolio in the Ducted and Packaged AC segment including the introduction of water-cooled series with eco-friendly R410a refrigerant. Company is also introducing 1.5 ton and 2-ton Hideaway Ceiling Concealed Ducted AC Units.
4. Company has launched a new and exclusive brand store in Vishakhapatnam which is the third in Visakhapatnam and 11th in the state of Andhra Pradesh. It offers a wide array of Voltas and Voltas Beko products, comprising Air Conditioners, Air Purifiers, Air Coolers, Commercial Refrigerators, Water Dispensers, Water Heaters, Water Coolers, Refrigerators, Washing Machines, Microwaves, and Dishwashers.
5. Voltas has recorded a 35 per cent sales growth to over 2 million units in FY24, becoming the first company in the domestic market to cross this mark. The performance was attributed to a consistent demand for cooling products during the year, coupled with a strong offline and online distribution network, and new innovative launches.
6. Recently the company launched ten new brand stores in various cities across India including Indore, Kolkata, Thane, Bhubaneswar, Ahmedabad, Lucknow, Chandigarh, and Ghaziabad, establishing its presence in these Tier II regions. This is a part of the company’s strategy to penetrate newer markets and cater to the rising demands of its customers with its extensive line-up of high-quality appliances.
7. Company recently forayed into the Water Heater segment with the launch of the Voltas Water Heaters, available across the country and across online channels. This expansion reinforces the company's vision of becoming a one-stop solution provider for all home appliances.
8. Expanding its footprint in the north east, company opened its new brand stores in Aizawl, in Mizoram which will work as an experience and purchase centre for the Company.
9. Company has also opened two new brand stores in Dewas (Madhya Pradesh) and Bhatapara which bolsters the brand’s retail presence in the region and offer a wide range of meticulously curated products of Voltas and Voltas Beko.
10. Making it foots strong in Rajasthan, company opened its first brand store in Chirawa, Rajasthan which also became the second brand store in Jhunjhunu as a part of the Company’s offline expansion plan.
11. Company also opened its new Exclusive brand store in Ghatkopar, Mumbai marking it the 25th brand store in Maharashtra. This new store in Mumbai will work as an experience and purchase centre for the Company.
12. Recently it opened first store in Jaipur, Rajasthan and in Port Blair which is 69^th store in East India.
13. Company also launched a new brand store in Kendrapara which becomes the first in Kendrapara and its 16th exclusive brand store in Odisha.
14. Company recently launched an extensive range of all new Voltas FreshAir Coolers which offers a wide range of features including the unique smart humidity controller for optimizing the humidity, 4-sided honeycomb padding for the ultimate cooling experience, mosquito repellent for protecting from mosquitos, 7 Hours timer for giving you uninterrupted sleep, turbo air-throw for cooling large spaces, less energy consumption and a Wi-Fi controller which enables hassle free operation of the product.
15. Universal MEP Projects & Engineering Services (UMPESL), a 100% subsidiary of Voltas Ltd. has bagged multiple SITC project orders worth ~INR 1770 Crores in the Electrical Power Distribution business including a solar power project. The company has been awarded these project orders spread across 26 districts of Uttar Pradesh, Madhya Pradesh, West Bengal, Odisha, and Karnataka.

In last 3 Years the stock gave a return of 55.58% as compared to the rise of Sensex and Nifty in the same period.

The company plans to expand its manufacturing facility in Chennai for rooms ACs with a proposed capex of around Rs. 450-500 crores BY FY25. The company is also trying for backward integration of certain products like Heat Exchanger, Cross Flow Fan and Plastic components, and it has also applied for PLI provided by the Government for the same category. 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 and company being the market leader is poised to get major benefits from it. Water Heaters segment is also thriving category in the Indian market with an annual demand of approximately 5 million units and the segment has also experienced consistent growth of 10-12% year on year, with a selling window of almost 10 months in a year and the company is planning to expand its wings further in this category to enjoy an additional flow of income in upcoming years. Considering company’s leadership position in various segments, diversified business model for continuous flow of income, standing order book positions under EPC business, growing demands for cooling & home appliances in India and a trust of TATA group company, investors can invest in this company for long term period with buy in dips strategy.

HET ZAVERI

info@smartinvestment.in

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