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Our View ‐  We remain positive on Voltas as it has demonstrated consistent market share gains along with industry leading margins in RAC. In other product categories like air‐cooler, it has been able to make its mark and has managed to reach No 2 position in a short span of time. Voltas‐Beko has started gaining traction with its domestic manufacturing facility now fully operational for DC refrigerators. It is on track to achieve 10% market share in Refrigerators and Washing machines by 2025. On the project side, outlook have been improving both in domestic and international geographies.

UCP – Pent up demand and higher pre‐buying by channel partners helped strong growth in off‐season quarter. Inverter AC grew 70% yoy now contributes 60% of the total RAC sold. Voltas continues to be leader in inverter AC segment with market share of 21.8% in inverter segment, with overall market of 26%. Margins in this segment improved on higher operating leverage and better product mix led to higher margin.

* Commercial refrigeration – Commercial refrigeration registered 101% volume growth led by strong B2B relations, increase in distribution with higher OEM share.

* Air‐cooler – Air‐coolers registered 11% growth. This growth was on back of increased SKU’s and increase in trade channel. Voltas is now No.2 player in Air‐ cooler with market share of 13.2%.

* Price increases – Company has taken 5‐6% of price increase across all the UCP categories to off‐set commodity price inflation

EMPS  ‐ Execution in project business has seen increased on improved business sentiment largely led by international operations. Voltas order intake for the quarter stands at Rs7bn. Its order book stands ast Rs7.2bn of which Domestic order book stands at Rs47.9bn and balance Rs27.8bn international. Domestic order book largely comprises from Water, HVAC, rural electrification and urban infra structure. International orders are from MEP, largely from UAE, Qatar and Oman. Infrastructure, Metros, Electricals outlook has significantly improved in terms of order intake. Margin were impacted as company had take necessary time based provision as conservative approach.  Expect normalized margin to be in range of 6‐7%

Voltas‐Beko – Voltas‐Beko has produced 2.1lakhs of DC refrigerator in its first year of operation. Voltas‐ Beko products have been well accepted in the market. Will soon start to manufacture frost‐free followed by top‐load washing machine and Dishwasher. Currently have 1000 billing points and exclusive outlets and experience centers. EBO’s have gone up to 195 from 90 in Q3FY20. Have slowed down expansion of channel as production is not being able to meet the existing demand. First priority is to increase the production and service existing channel better rather than expand new channel. Have taken price increase to the tune of 5‐6%.

PLI scheme – Will wait for final fine print before taking any call on the PLI scheme as it depends on incremental revenue and capex to be incurred.

De‐merger – Board has approved demerger of domestic project business relating to MEP/HVAC Mining and Construction Equipment (M&CE) business and Textile Machinery Division (TMD) to its wholly owned subsidiary Universal MEP Projects & Engineering Services Limited ('UMPESL') (formerly Rohini lndustrial Electricals Limited) by slump sale through a Business Transfer Agreement.

Outlook – Voltas remains cautiously optimistic of the upcoming summer, with commodity price inflation and sea‐freight still a worry. Voltas will continue to remain responsible and balance both margin and growth

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