Published on 19/04/2017 1:10:22 PM | Source: Motilal Oswal Securities Ltd

Neutral On Voltas Ltd For Target Rs.374.00 - Motilal Oswal

Posted in Broking Firm Views - Long Term Report | #Voltas Ltd. #Capital Goods Sector #Broking Firm Views Report #Motilal Oswal


* Unitary cooling division (UCP) is likely to report revenue growth of 8% YoY, given primary channel filling, driven by a strong summer and LG vacating the fixed-speed air conditioning segment.

* We expect revenue growth of 6% YoY in the MEP segment, led by high base effect (37% YoY growth in 4QFY16). However, the key monitorable would be sustainability of margins in the segment. VOLT had booked EBIT margin of 3.9% in 4QFY16 on positive closure of certain old projects, provision reversal and higher margin new projects getting executed.

* Prevailing weak crude prices have raised apprehensions over the pace of order awards and also execution in the Middle East. Even in the domestic market, new project awards remain constrained. Maintain Neutral.

 

Key issues to watch

* Impact of LG vacating the fixed-speed air conditioning segment on VOLT’s market share and sales.

* Sustainability of profitability in the MEP segment and also capital employed in MEP business.

 

To Read Complete Report & Disclaimer Click Here    

 

For More Motilal Oswal Securities Ltd  Disclaimer http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html SEBI Registration number is INH000000412    

 

Above views are of the author and not of the website kindly read disclaimer