Voltas shares slip 4% despite strong Q1 show; analysts flag margin risk
Voltas share price: Shares of Tata group company Voltas Limited declined by 4 per cent in Monday’s trading session following the Q1 results for the financial year 2026-27 (FY27), even as revenue and profit growth remained healthy, sustaining market leadership with market share gains of ~400bp over the second player.
Voltas posted its Q1 earnings post-market hours on Friday. Today, the air conditioner manufacturer’s stock slumped to ₹1,270.60 on the BSE, down 4.1 per cent from its previous close of ₹1,325 apiece.
Voltas shares: Worth buying after Q1?
Voltas reported an 18.50 per cent year-on-year (Y-o-Y) growth in its revenue from operations to ₹4,765 crore for Q1 FY27 compared with ₹4,021 crore in the corresponding quarter a year ago. The profit after tax rose to ₹213 crore from ₹141 crore a year ago, recording a sharp 51 per cent Y-o-Y increase.
The company has also announced a joint venture (JV) with Atomberg Innovation to manufacture RAC compressors, initially with a capacity of ~2.8 million units.
Following the earnings announcement, Elara lowered the earnings per share (EPS) estimates by 8 per cent for FY28 as near-term margin pressures persist due to geopolitical tensions. However, it raised EPS estimates by 5 per cent for FY29 as the compressor JV would support margin expansion.
The brokerage also raised the target price from ₹1,360 to ₹1,410 while retaining an ‘Accumulate’ rating on the stock.
“RAC remains underpenetrated in India and Voltas, being the market leader, is the key beneficiary from this tailwind. We expect an earnings CAGR of 62 per cent during FY26-29E and an average ROE and ROCE of 15 per cent & 14 per cent, respectively, during FY27-29E,” it added.
On the other hand, Nomura maintained its ‘Neutral’ call on Voltas share price with a reduced target price of ₹1,357 from ₹1,368 earlier. It said that focus on market share over profitability will keep margin recovery slower, while compressor JV localisation execution will remain a key monitorable for meaningful benefits in the longer term.
The brokerage also lowered its revenue estimates by ~4 per cent and FY27F/28F UCP margins by 50bp to 7 per cent/8.5 per cent, leading to ~8 per cent EPS cut. LG remains its preferred bet in the sector.
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